Comprehensive Annual Financial Report Fiscal Year Ending on December 31, 2018

City of South Bend, Indiana Comprehensive Annual Financial Report Fiscal Year Ending on December 31, 2018

Pete Buttigieg, Mayor Daniel Parker, City Controller Benjamin Dougherty, Deputy City Controller Amy Shirk, Director of Accounting & Budget

Report prepared by City of South Bend Department of Administration and Finance City of South Bend, Indiana Table of Contents

Introductory Section Letter of Transmittal ...... i-viii GFOA Certificate of Achievement ...... ix Organization Chart ...... i List of City Officials ...... xi

Financial Section Independent Auditor's Report ...... 1-3 Management's Discussion and Analysis ...... 4-25 Basic Financial Statements Government-wide Financial Statements: Statement of Net Position ...... 26-27 Statement of Activities ...... 28 Fund Financial Statements: Governmental Funds: Balance Sheet ...... 29-30 Reconciliation of the Balance Sheet to the Statement of Net Position...... 31 Statement of Revenue, Expenditures, and Changes in Fund Balances ...... 32-33 Reconciliation of the Statement of Revenue, Expenditures, and Changes in Fund Balances to the Statement of Activities...... 34 Proprietary Funds: Statement of Net Position ...... 35-36 Statement of Revenue, Expenses, and Changes in Net Position ...... 37 Statement of Cash Flows ...... 38-39 Fiduciary Funds: Statement of Fiduciary Net Position ...... 40 Statement of Changes in Fiduciary Net Position ...... 41 Notes to Financial Statements ...... 42-97 Required Supplemental Information 1925 Police Officers' Pension Plan Schedule of Investment Returns ...... 98 1925 Police Officers' Pension Plan Schedule of City Contributions ...... 99 Schedule of Changes in the Net Pension Liability and Related Ratios ...... 100 Schedule of Pension Investment Returns ...... 101 1937 Firefighters' Pension Plan Schedule of City Contributions ...... 102 Schedule of Changes in the Net Pension Liability and Related Ratios ...... 103 Schedule of City Contributions ...... 104 Schedule of the City's Proportionate Share of the Net Pension Liability ...... 105 Schedule of City Contributions ...... 106 Schedule of the City's Proportionate Share of the Net Pension Liability ...... 107 Schedule of City Contributions ...... 108 Schedule of the City's Proportionate Share of the Net Pension Liability ...... 109 Schedule of Changes in the City’s Total OPEB Liability and Related Ratios ...... 110 Budgetary Comparison Schedules - General Fund and Major Special Revenue Funds ...... 111-118 Budget/GAAP Reconciliation ...... 119 Notes to Required Supplemental Information ...... 120-121

City of South Bend, Indiana Table of Contents (Continued)

Other Supplemental Information ...... 122 Nonmajor Governmental Funds: Fund Descriptions ...... 123-130 Combining Balance Sheet ...... 132-140 Combining Statement of Revenue, Expenditures, and Changes in Fund Balances ...... 141-150 Schedules of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual ...... 151-219 Nonmajor Enterprise Funds: Fund Descriptions ...... 220 Combining Statement of Net Position ...... 221 Combining Statement of Revenue, Expenses, and Changes in Net Position ...... 222 Combining Statement of Cash Flows ...... 223-224 Internal Service Funds: Fund Descriptions ...... 225 Combining Statement of Net Position ...... 226 Combining Statement of Revenue, Expenses, and Changes in Net Position ...... 227 Combining Statement of Cash Flows ...... 228-229 Fiduciary Funds: Fund Descriptions ...... 230 Statement of Fiduciary Net Position ...... 231 Statement of Changes in Fiduciary Net Position ...... 232 Schedule of Changes in Assets and Liabilities ...... 233 Statistical Section ...... 234 Financial Trend Information Net Position by Component ...... 235 Changes in Net Position ...... 236-238 Fund Balances - Governmental Funds ...... 239 Changes in Fund Balances - Governmental Funds ...... 240 Financial Institutions ...... 241

Revenue Capacity Information Property Tax Levies and Collections ...... 243 Direct and Overlapping Property Tax Rates ...... 244 Detail of Net Assessed Value ...... 245 Assessed Value and Actual Value of Taxable Property ...... 246 Net Assessed Value of Taxable Property ...... 247 Assessed Value of Taxable Property ...... 248 Property Tax Collections - Cash Basis ...... 249 2017 Circuit Breaker Property Tax Cap Credits ...... 250 Principal Property Taxpayers ...... 251 Local Income Tax Revenue (CEDIT)...... 252 Local Income Tax Revenue (COIT) ...... 253 Local Income Tax Revenue (PS LOIT) ...... 254 Total County Income Tax Distributions by Taxing Unit ...... 255 Ten Largest Water Customers ...... 256 Ten Largest Sewage Works Customers ...... 257 Gasoline Tax Collections - Cash Basis ...... 258 Wheel and Excise Surtax Collections - Cash Basis ...... 259 Hotel/Motel Tax Revenue - Cash Basis - City Distributions ...... 260 Professional Sports Development Area (PSDA) Tax - Cash Basis ...... 261 Cable Television Franchise Fee Collections - Cash Basis ...... 262

City of South Bend, Indiana Table of Contents (Continued)

Debt Capacity Information Computation of Legal Debt Margin ...... 264 Legal Debt Margin Information ...... 265 Ratios of Outstanding Debt by Type...... 266 Computation of Direct and Overlapping Debt ...... 267 Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to Total General Government Expenditures ...... 268 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net Bonded Debt Per Capita ...... 269 St. Joseph County Hotel/Motel Tax Board Statement of Estimated Cash Flow and Debt Service Coverage ...... 270 Schedule of Revenue Bond Coverage - Water Utility Bonds ...... 271 Schedule of Revenue Bond Coverage - Wastewater Utility Bonds ...... 272 Municipal Sewage Works Annual Wastewater Flow Data and Number of Customers ...... 273 Statement of City-Owned Utility Debt ...... 274 Estimated Debt Service Coverage Calculation of Sewage Works ...... 275 Estimated Debt Service Coverage Calculation of Water Utility ...... 276 Projected City of South Bend COIT Revenue ...... 277 Projected City of South Bend CEDIT Revenue ...... 278 Projected City of South Bend PS LOIT Revenue ...... 279 Statement of Estimated Cash Flow and Debt Service Coverage (COIT) ...... 280 Statement of Estimated Cash Flow and Debt Service Coverage (CEDIT) ...... 281 Estimated Tax Increment Revenue - Erskine Village Project ...... 282 Demographic and Economic Information Demographic Statistics ...... 284-285 Employment by Type and Industry ...... 286 Comparison of Growth Rates in Personal Income for St. Joseph County, the State of Indiana, and U.S. Personal Income ...... 287 Principal Employers ...... 288 Operating Information New Construction - Number of Permits and Property Values ...... 290 Capital Asset and Infrastructure Statistics by Function ...... 291 Operating Indicators by Function/Program ...... 292 Full-time City Government Employees by Department ...... 293-294 Salary Rate Comparison ...... 295 Insurance Coverage ...... 296 Miscellaneous Statistics ...... 297-298

1200N COUNTY-CITY BUILDING PHONE 574/ 235-7678 227 W. JEFFERSON BLVD. FAX 574/ 235-9928 SOUTH BEND, INDIANA 46601-1830

CITY OF SOUTH BEND PETE BUTTIGIEG, MAYOR DEPARTMENT OF ADMINISTRATION AND FINANCE

June 30, 2019

The Honorable Pete Buttigieg, Mayor of the City of South Bend Members of the City of South Bend Common Council Residents of the City of South Bend:

The comprehensive annual financial report of the City of South Bend, Indiana (the "City") for the year ended December 31, 2018 is hereby submitted. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with management. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the government’s financial activities are included.

Generally Accepted Accounting Principles (GAAP) requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of the Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of South Bend’s MD&A can be found immediately following the independent auditors’ report.

The Comprehensive Annual Financial Report is presented in four sections: introductory information, financial information, statistical information and federal compliance information. The introductory section includes this transmittal letter, the City’s organizational chart, a list of principal City officials and the Certificate of Achievement for Excellence in Financial Reporting awarded to the City of South Bend for the year ending December 31, 2017. The financial section begins with the independent auditors’ report on the City’s financial statements and schedules, the City managements’ discussion and analysis report, followed by the City’s basic financial statements and accompanying notes. The remaining portion of this section includes the combining and individual fund and other financial statements and schedules. The statistical section includes selected financial and demographic information generally presented on a multi-year basis, which has been provided to give the reader a broader understanding of the City. The federal awards compliance section, which includes the results of the supplemental audit of the City’s federal awards and the internal controls necessary for compliance, is included in a separate report.

The City is required to undergo an annual single audit in conformity with the provisions of the Code of Federal Regulations Title 2 Part 200, the provisions of Indiana Code section 5-11-1-9 and the requirements of the Indiana State Board of Accounts. Information related to the single audit, including the schedule of federal financial assistance, findings and recommendations, and the auditors’ reports on the internal control structure and compliance with applicable laws and regulations, is included in a separate report.

i The following pages of this transmittal letter begin with a general overview of South Bend and the surrounding area. Also summarized are the key financial, budgetary and property tax controls with which the City is required to comply. The remainder includes a discussion of the prior year’s financial challenges and accomplishments, the City’s goals and objectives for this year and beyond, and other key issues the City is facing along with the impact they may have on current and future budgets.

GENERAL INFORMATION

The City of South Bend is the county seat of St. Joseph County, Indiana, and is the fourth largest city in the state. The City of South Bend’s 2010 U.S. Bureau of the Census population was 101,168. Accordingly, South Bend is classified as a “City of the Second Class” under Indiana statutes (cities with a population of 35,000 to 250,000). Population estimates in 2018 suggest that the city continues to experience growth, pointing the way to further growth before the 2020 census. The City of South Bend operates with a mayor as chief executive and a nine-member City Common Council composed of six members elected from districts and three members elected at-large. The City of South Bend has a bond rating of AA with Standards & Poors, one of the highest bond ratings for any city in the State of Indiana.

The City provides a full range of traditional general governmental services to its residents. These services include police and fire protection; sanitation services; the construction and maintenance of highways, streets and infrastructure; recreational activities and cultural events. In addition to general governmental activities, the City exercises oversight over the South Bend Water Works, the South Bend Wastewater Treatment Facility, the Century Center Convention Center, the Morris Performing Arts Center, the Studebaker National Museum, the City of South Bend Redevelopment Commission and Authority, and several downtown parking facilities.

Location

St. Joseph County lies within the heartland of the manufacturing belt and metropolitan regions of the Upper Midwest and Canada. The City of South Bend is located in the north central part of Indiana, ten miles south of the Michigan state line, and is commonly known to be within the South Bend/Elkhart region. The region is a vibrant and diverse area with a strong economy based on a mix of health care, agricultural, service, manufacturing, education and other commercial and tourism industries. This diverse economic mix creates varied employment opportunities for the area’s residents while providing insulation via diversification from future economic downturns.

The city is approximately 90 miles east of Chicago and 140 miles north of Indianapolis. Accessibility to transportation, including Interstate 80/90, an international airport (which is the second busiest in the State of Indiana) and the South Shore Line has supported economic growth within the community. Proximity to Chicago, the largest rail and intermodal (rail/truck/ocean/inland waterway) transfer point in the country, is a significant advantage to the City of South Bend as is proximity to the University of Notre Dame with its scenic campus located adjacent to the city limits. In 2017, the City of South Bend announced plans to partner with the Federal, State and other local governments to reduce the South Shore Line travel time to downtown Chicago to 90 minutes or less by the year 2020. The plans for this project continued in 2018. When completed, this project will be transformative to the local economy.

St. Joseph County / South Bend - Economic Conditions and Outlook

St. Joseph County, with its 2010 U.S. Bureau of the Census population of 269,141, boasts a strong history of manufacturing which continues today. The service industry and retail trade have also flourished, creating a balance that serves the community well. The County experienced a net growth in population of 28,317 (11.8% increase) between 1960 and 2010. After experiencing a reduction of 2.6% during 1969 to 1983, at which time the entire Midwest was at the depth of its economic restructuring and recess, the County’s population increased 4.0% between 1983 and 1990 and another 7.5% between 1990 and 2000. The population of St. Joseph County has remained fairly flat during the past decade increasing by only 1,372 residents from 2000 to 2010.

The estimated labor force in St. Joseph County is 137,668 workers (2018, STATS Indiana, using data from the Indiana Department of Workforce Development). The workers are typical of the Midwest: well-trained with a strong work ethic. Approximately 87.9% of the area’s adult population are high school graduates or higher (as compared to the national average of 89%) with an estimated 28.4% with a Bachelor’s Degree or higher. There are nine colleges, universities and technical schools within South Bend and the surrounding area including the University of Notre Dame; Indiana University South Bend; Bethel College; Saint Mary’s College; Purdue University College of Technology at South Bend; Holy Cross College; Trine University South Bend; American National University; and Ivy Tech Community College. The St. Joseph County 2018 Annual Average Unemployment was 3.2%, which is slightly lower than the State of Indiana unemployment rate of 3.3%. The unemployment rate in St. Joseph County is similar to the surrounding counties—Elkhart (3.1%), LaPorte (4.3%), and Marshall (3.0%) in Indiana and Cass (4.2 %) and Berrien (4.8 %) in Michigan (2018 Annual Average).

The employment profile for St. Joseph County provides a good overview of the economic make- up of this community. Employment estimates for the County’s major economic sectors are as follows (STATS Indiana 2018 Summary, using data from US Bureau of Labor Statistics):

Economic Sector Number Employed % of Total Educational Services, Healthcare, Social Assistance 31,069 25.2% Manufacturing 15,075 12.2% Retail Trade 13,966 11.3% Arts, Entertainment, Recreation, Accommodation, Food Services 13,550 11.0% Professional, Scientific, Management, Administrative, Waste Management Services 12,221 9.9% Other Services 11,108 9.0% Wholesale Trade 5,684 4.6% Construction 5,150 4.2% Finance and Insurance, Real Estate, Rentals, Leasing 5,113 4.1% Public Administration 4,502 3.7% Transportation and Warehousing, and Utilities 4,114 3.3% Information 1,666 1.4% Total 123,218 100.0%

iii

According to the United States Census Bureau’s 2013-2017 American Community Survey 5-Year Estimates. St. Joseph County presently has an estimated 100,861 households with a median household income of $48,121, which compares to the State of Indiana median household income of $52,182 and the United States median household income of $57,652. Surrounding counties have similar median household incomes—Elkhart ($52,449), La Porte ($49,921), and Marshall ($51,869) in Indiana and Cass ($50,699) and Berrien ($47,132) in Michigan.

Health and education lead the employment statistics for St. Joseph County. The largest employers in St. Joseph County as of August 2017 were as follows: Beacon Health System (4,683); University of Notre Dame (5,802); South Bend Community School Corporation (3,615); St. Joseph Health System (2,626); Indiana University – South Bend (1,277); St. Joseph County (1,068); City of South Bend (1,139); AM General (800); Honeywell International, Inc. (700); and Press Ganey Associates, Inc. (694).

The following provides a profile of the residents of St. Joseph County (US Census Bureau 2013-2017 American Community Survey 5-Year):

Gender %, male/female: 48.7% male; 51.3% female

Age: 26.2% under 20 5.7% 20-24 years of age 23.2% 25-44 years of age 28.6% 45-64 years of age 16.3% 65 years of age and older

Race: 73.8% White 15.3% Black/African American 6.5% Hispanic/Latino 2.1% Asian 2.3% Other

Home Ownership: 68.5% own; 31.5% rent/other

The cost of living continues to be one of the greatest advantages of living in this community. The housing costs in South Bend are well below the national and regional averages. Per a report compiled by the National Association of Realtors in the fourth quarter of 2018, the median sales price for a single-family home in the South Bend-Mishawaka Statistical Area was $132,900 as compared to a median sales price of $255,600 in Chicago and $173,700 in Indianapolis. The national median sales price is $254,000.

Between January 2016 and December 2018 the City of South Bend has seen approximately $445 million in private investment and the announcement of close to 1,500 new jobs. By providing state of the art innovative infrastructure and, in some cases, offering targeted assistance the City can stimulate private investment, creating business opportunities and jobs. The City has had many significant economic development projects to include new downtown residential housing, mixed use developments, downtown hotels, and high tech industrial projects. City investments encourage new start-up businesses, strengthen existing business, attract new jobs, increase assessed value and emphasize direct investment in hard-to-develop areas. Efforts have been and will continue to focus on implementing the comprehensive plans for our neighborhood and downtown areas.

The South Bend Community School Corporation serves the entire City and some of the surrounding area and has a current enrollment of approximately 17,700 students in grades pre- kindergarten through 12. An estimated 5,330 students attend private or parochial schools within the City. The nine institutions of higher education and technical training located within the South Bend area have a total enrollment of approximately 27,000. Over the years, the University of Notre Dame has provided a stabilizing influence on the economy with a very significant positive economic impact upon the community.

South Bend History and Amenities

In 1820, Pierre Navarre of the American Fur Trading Company was the first settler in the area to become later known as South Bend. South Bend has continued to progress in its growth since 1842 when Father Edward Sorin named his rustic log chapel “Notre Dame du Lac” and began to teach the local Indians. Today the chapel has grown into the University of Notre Dame. In 1852, H.C. Studebaker started the industry of making wagons and horse-drawn buggies that evolved into the manufacturing of the Studebaker automobile. It made the name Studebaker synonymous with the area of South Bend and its major employer until its closure in 1963.

Another industrial firm that would later become the area’s largest began in 1923 when Vincent Bendix began manufacturing automotive brakes. In 1929, the company became the Bendix Aviation Corporation, and now, as Honeywell (formerly AlliedSignal Inc.), is a leading manufacturer of automotive and aerospace products. The Singer Sewing Company and the Oliver Chilled Plow Works were other important companies during the early history of South Bend.

In the 1840s and 1850s, many South Bend residents were secretly involved in helping fugitive slaves escape from the South through the Underground Railroad. Many residents of South Bend and St. Joseph County offered their homes, barns and businesses up as “stations” or safe places in which runaways could eat and rest as they made their way North. Most notable among local Underground Railroad conductors was James Washington, a well-known and well-respected free Black in South Bend. Mr. Washington was a barber who, along with Mr. Sawyer, collected money from local citizens to fund the Underground Railroad.

Special attractions within the South Bend area include the Olympic-class East Race Waterway and the East Bank area; the renovated Morris Performing Arts Center, which provides for the Broadway Theater League, the South Bend Symphony Orchestra with the Chamber and Pops Orchestras, and the Southold Dance Theater and Patchwork Dance Company; the award-winning South Bend Civic Theater; the Studebaker National Museum; the South Bend Museum of Art; the Snite Museum of Art at Notre Dame; the Northern Indiana Center for History; Copshaholm/The Oliver Mansion; Century Center; Potawatomi Zoo; the Morris Conservatory/Muessel-Ellison Tropical Gardens; Healthworks! Kids Museum; the Farmers’ Market; and the Byers Softball Complex. The Four Winds Field Baseball Stadium is a 5,600-seat facility which opened in 1987 and is rated among the best in minor league baseball. The stadium is home to the South Bend Cubs, a minor league team affiliated with the Chicago Cubs.

Additional miscellaneous information about the City of South Bend can be found in the statistical section of this report.

Financial, Budgetary and Property Tax Controls

The City’s management team is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the government are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. On November 28, 2016, the South Bend Common Council approved a new Internal Controls policy for the City.

Single Audit. As a recipient of federal and state financial assistance, the City is also responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by management of the City. As part of the City’s single audit described earlier, tests are performed to review internal controls to determine the auditing procedures that are appropriate under the circumstances, including that portion related to federal financial assistance programs, as well as to determine that the City has complied with applicable laws and regulations. The results of the City’s single audit for the year ended December 31, 2018 are included in a separate report.

Budgetary Controls. In accordance with Indiana statutes, the City maintains budgetary controls integrated within the accounting system. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget (prepared on a cash basis) which is adopted by the Common Council or Redevelopment Commission (depending on the fund) and then reviewed and approved by the State of Indiana Department of Local Government and Finance (DLGF). Activities of the general fund, special revenue funds, capital project funds, enterprise funds, internal service funds, pension trust funds and debt service funds are included in the annual budget. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established by major budget classification within funds. The Mayor and Common Council may transfer appropriations from one major budget classification to another within a department by ordinance if the total appropriations for that fund are not exceeded. Additional appropriations in excess of the original budget must be approved by the Mayor and Common Council and are also submitted to the DLGF for either approval or acknowledgement (depending on the fund). Additional appropriations for funds approved by the Redevelopment Commission do not require DLGF approval. The deadline for adoption of the annual budget is November 1. The city’s fiscal year begins on January 1.

The City maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts do not lapse at year end and are carried over to the following year as a part of the subsequent year’s budget.

Property Tax Controls. In addition to budgetary and other controls established by Indiana law, the City must operate within specific and rigid controls governing the amount of property tax it may levy. The property tax control program, which began in 1973, limits the amount of property tax that may be levied by each unit of government in its legally budgeted funds. The total amount of property tax levied by the unit may increase by the six-year average annual growth in Indiana personal non-farm income, as calculated by the U.S. Bureau of Economic Analysis, with a 6% maximum.

During March 2008, the State of Indiana General Assembly enacted property tax reform legislation which made significant changes in the property tax system by capping the amount of property taxes at 1% of grossed assessed value for residential homesteads, 2% for agricultural/rental properties and 3% for all other real and personal property. This legislation was phased in over a two-year period beginning in 2009. The loss of revenue to the City due to this legislation was significant (estimated to be over $33.9 million dollars) but this revenue loss has been offset by cost savings and the adoption of local option income taxes to continue providing essential City services, including police and fire protection. A historical view of the City’s tax rate and its net assessed valuation has been included in the statistical section of this document.

Mayoral Leadership

Mayor Pete Buttigieg, a Harvard University graduate and Rhodes Scholar, assumed office on January 1, 2012, bringing with him a group of leaders with new ideas and energy to implement transformational reform to city government. When elected at age 29, Mayor Buttigieg was the youngest chief executive of a municipality exceeding 100,000 residents in the United States. In his second term as Mayor for the City of South Bend, Mayor Pete has entered the national political scene and has been promoting the City of South Bend at the national level as a city based on best practices and innovative ideas.

City Values

The administration of Mayor Buttigieg has a single, overarching mission— we deliver services that empower everyone to thrive. In support of this vision, the Mayor has established three main pillars of administration policy:

1. Make the basics easy – Provide residents high quality services at the greatest value to the taxpayer, maintaining widespread confidence that the fundamentals are managed well.

2. Deliver Good government – Put residents first always, leading by example, gathering input, and transparently communicating our intentions, decisions, and actions.

3. Invest in people and places – Support residents with design, policy, and programming for a strong and inclusive economy, vibrant culture, and great public spaces.

Values In the administration In the community EXCELLENCE For each major area of service Establish a path for major indicators delivery, establish South Bend as the of resident well-being to reach the best in the state, and/or in the top status of best-in-state or top-25% 25% nationally, measuring and nationally, including the means to reporting progress. measure progress. ACCOUNTABILITY Put residents first always, offering Promote a culture of civic services at the greatest value to the engagement in which we hold one taxpayer, with clear and transparent another to a high standard of indications of how the government is respect, stewardship, and support for using public resources. our shared community. INNOVATION Deliver better services more efficiently Foster a culture of innovation in by introducing creative approaches to South Bend’s social and private government operations, questioning sectors, seeking and developing the habit and using evidence to best ideas and practices from within continually improve. and beyond our city limits. vii

In the administration In the community INCLUSION Ensure the city administration, as an Develop a community in which employer and as a purchaser, reflects everyone has an equal opportunity to the community it serves and includes thrive by expanding access and diverse voices in our decision-making participation to all, incorporating and actions. diverse voices throughout the city. EMPOWERMENT Establish a work environment that Support the ability of all residents to enables employees to contribute live a safe, healthy, meaningful life in richly to the administration and the South Bend, contributing as they are community, taking pride and able and benefiting from all that our ownership in our work. community offers.

Awards

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of South Bend for its comprehensive annual financial report for the fiscal year ended December 31, 2017. This was the 28th consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate.

Acknowledgments

The preparation of the Comprehensive Annual Financial Report (CAFR) was made possible by the dedicated service of the City’s departmental fiscal officers and the staff of the Department of Administration and Finance. Each fiscal officer and member of the Administration and Finance Department has our sincere appreciation for the contributions made in the preparation of this report. We would especially like to acknowledge the efforts of the core CAFR preparation team of Ben Dougherty, Amy Shirk, Rahman Johnson, Ken Glowacki, Maricela Juarez and consultant Bruce Snyder. In addition, we would like to thank the Field Examiners of the Indiana State Board of Accounts (led by Martha Harper, John Rucano III and Alex Flores) for their hard work and dedication in this effort.

In closing, without the leadership and support of Mayor Pete Buttigieg, City Department Heads, City Fiscal Officers and members of the City of South Bend Common Council, preparation of this report would not have been possible.

Sincerely,

Daniel T. Parker City Controller

viii

Government Finance Officers Association

Certificate of Achievement for Excellence in Financial Reporting

Presented to City of South Bend Text38: Indiana

For its Comprehensive Annual Financial Report for the Fiscal Year Ended

December 31, 2017

Executive Director/CEO

ix Residents of South Bend

City Council Mayor City Clerk

Venues, Parks, & Community Consolidated Administration & Innovation & Police Department Fire Department Public Works Legal Department Code Enforcement Arts Investment Building Finance Technology (Chief) (Chief) (Director) (City Attorney) (Director) (Director) (Director) Department (City Controller) (Chief Innovation (Commissioner) Officer)

Redevelopment Board & Board of Public Board of Public Board of Park Board of Public Authority/ Budget & Building Department Administration Safety (1) Safety (1) Commisioiners (1) Works (1) Accounting Services Redevelopment Permitting Support Commission (2)

Facilities & Operations Operations Engineering Business Design Review & Treasury Ordinances Code Inspections Grounds Infrastructure Development Plan Review

Neighborhood Patrol Services Recreation Streets & Sewers Neighborhood Safety & Risk Litigation Enhancement Development Inspections Applications Action Team (NEAT)

Water Works & Support Training Experience Engagement & Purchasing Wastewater Utility Animal Care & Economic Business Analytics Control Resources

Civic Center Board Human Capital & Fire Prevention Solid Waste of Managers (3) Planning Inclusion 311 Call Center

EMS Venue Operations Sustainability General Central Services Administration

(1) Board Members include Mayoral Appointments (2) Board Members include Mayoral and Council Appointments for Redevelopment Commission, Mayoral Appointment for Redevelopment Authority (3) Board Members include 5 mayoral appointees and 4 council appointees

Effective January 1, 2019 x

CITY OFFICIALS

Office Official Term

Mayor Pete Buttigieg 01-01-16 to 12-31-19

Controller Jennifer Hockenhull 01-01-18 to 10-23-18 Daniel Parker 12-10-18 to 12-31-19

City Clerk Kareemah Fowler 01-01-16 to 12-31-19

President of the Board of Public Works Gary A. Gilot 01-01-12 to 12-31-19

Common Council Members 1st District Tim Scott 01-01-16 to 12-31-19 2nd District Regina Williams-Preston 01-01-16 to 12-31-19 3rd District Randy Kelly 01-01-16 to 02-10-18 3rd District Sharon McBride 02-24-18 to 12-31-19 4th District Jo M. Broden 01-01-16 to 12-31-19 5th District David Varner 01-01-16 to 05-14-18 5th District Jake Teshka 06-04-18 to 12-31-19 6th District Oliver Davis 01-01-16 to 12-31-19 At Large Karen L. White 01-01-16 to 12-31-19 At Large John Voorde 01-01-16 to 12-31-19 At Large Gavin Ferlic 01-01-16 to 12-31-19

STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINGTON STREET ROOM E418 INDIANAPOLIS, INDIANA 46204-2769

Telephone: (317) 232-2513 Fax: (317) 232-4711 Web Site: www.in.gov/sboa

INDEPENDENT AUDITOR'S REPORT

TO: THE OFFICIALS OF THE CITY OF SOUTH BEND, ST. JOSEPH COUNTY, INDIANA

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of South Bend (City), as of and for the year ended December 31, 2018, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the Table of Contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

1 INDEPENDENT AUDITOR'S REPORT (Continued)

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of December 31, 2018, and the respective changes in financial position and, where applicable, cash flows thereof and for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 21 to the financial statements, during 2018, the City adopted new accounting guidance in Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. We did not modify our opinion regarding this matter.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, Schedules of Investment Returns, Schedules of Contributions, Schedules of Changes in the City Net Pension Liability and Related Ratios, Schedules of the City's Proportionate Share of the Net Pension Liability, Schedule of Changes in the City's Total OPEB Liability and Related Ratios, Budgetary Comparison Schedules, and Budget/GAAP Reconciliation, as listed in the Table of Contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying Fund Descriptions, Combining Balance Sheet, Combining Statement of Revenue, Expenditures, and Changes in Fund Balances, Budgetary Comparison Schedules, Combining Statements of Net Position, Combining Statements of Revenue, Expenses, and Changes in Net Position, Combining Statements of Cash Flows, Statement of Fiduciary Net Position, Statement of Changes in Fiduciary Net Position, Schedule of Changes in Assets and Liabilities, and Introductory and Statistical Sections are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The Fund Descriptions, Combining Balance Sheet, Combining Statement of Revenue, Expenditures, and Changes in Fund Balances, Budgetary Comparison Schedules, Combining Statements of Net Position, Combining Statements of Revenue, Expenses, and Changes in Net Position, Combining Statements of Cash Flows, Statement of Fiduciary Net Position, Statement of Changes in Fiduciary Net Position, and Schedule of Changes in Assets and Liabilities are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit

2 INDEPENDENT AUDITOR'S REPORT (Continued)

of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements, and other budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated June 24, 2019, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance.

Paul D. Joyce, CPA State Examiner

June 24, 2019

3 City of South Bend, Indiana Management’s Discussion and Analysis

The management of the City of South Bend, Indiana (the “City”) provides herewith this Management’s Discussion and Analysis (MD&A) of the financial activities and condition of the City of South Bend, Indiana for the fiscal year ended December 31, 2018. Readers of the information contained within this Management’s Discussion and Analysis, and any opinion derived therein, should be considered as a part of the greater whole of the financial statements, notes to the financial statements, supplemental information and letter of transmittal, as contained within this Comprehensive Annual Financial Report (CAFR). The City of South Bend is the county seat of St. Joseph County, Indiana, and is the fourth largest city in the state of Indiana. St. Joseph County is located within the heartland of the manufacturing and metropolitan regions of the Upper Midwest. The City of South Bend is located in the north central region of the state of Indiana, five (5) miles south of the Indiana / Michigan state boundary line. The City is approximately ninety (90) miles east of the city of Chicago and one hundred forty (140) miles north of the city of Indianapolis. The 2010 U.S. Bureau of the Census population for the City of South Bend was reported as 101,168 and the 2010 Census population for St. Joseph County was reported as 266,931. Accordingly, South Bend is classified as a “Second Class City” under State of Indiana statutes, defined as cities with a population between 35,000 and 600,000 residents. The City of South Bend and St. Joseph County is a vibrant and diverse area with a strong local economy based on a mix of agricultural, manufacturing and service, higher education, health care and other commercial and tourism based industries. The diverse economic mix creates varied employment opportunities for residents while providing insulation from economic downturns through diversification. South Bend is home to the University of Notre Dame. The City of South Bend provides a full range of general governmental services to its residents. Services include general government, public safety, street construction and maintenance, infrastructure construction and maintenance, parks and recreation services, arts and culture, and sanitation services. In addition, the City provides water utility, wastewater utility and solid waste services to commercial and residential properties within the city. City operations also include the Century Center convention venue, Morris Performing Arts Center, Palais Royale Ballroom, Studebaker National Museum, and public parking garages within the city footprint. The City of South Bend governmental structure includes elected officials as follows with defined management and legislative authority in compliance with Indiana law.

Mayor Chief Executive Officer 4-year term Common Council 9 member legislative body 4-year term 6 from defined districts within the City 3 at-large members City Clerk Secretary of the Common Council 4-year term

The current terms of office for Common Council members, Mayor and City Clerk expire on December 31, 2019. The City of South Bend was incorporated in 1865, is compliant with Indiana statutes, and remains as such through the period covered by this Management’s Discussion and Analysis report.

4 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

Financial Highlights

Governmental Activities Business-type Activities Government-wide 2018 2017 2018 2017 2018 2017 Assets/deferred outflows $ 548,601,067 $ 543,902,663 $ 311,288,459 $ 312,819,367 $ 859,889,526 $ 856,722,030

Liabilities/deferred inflows 390,492,918 395,496,366 100,602,999 109,507,976 491,095,917 505,004,342

Net Position Net investment in capital assets 143,282,487 155,912,682 145,963,344 145,585,038 289,245,831 301,497,720 Restricted 11,252,528 9,245,531 33,936,695 29,623,015 45,189,223 38,868,546 Unrestricted 3,573,134 (16,751,916) 30,785,421 28,103,338 34,358,555 11,351,422

Total net position $ 158,108,149 $ 148,406,297 $ 210,685,460 $ 203,311,391 $ 368,793,609 $ 351,717,688

Change vs. prior year $ 9,701,852 $ (456,783) $ 7,374,069 $ 700,900 $ 17,075,921 $ 244,117

Expenses 164,683,229 160,322,797 65,978,297 71,240,609 230,661,526 231,563,406 Revenues 169,155,420 155,742,831 78,582,027 76,064,692 247,737,447 231,807,523

• Note: The City had two prior period adjustments that affected net position as of December 31, 2017. The first prior period adjustment was related to the implementation of GASB Statement 75 and had the effect of raising Other Post-Employment Benefits (OPEB) liability as of December 31, 2017 by $13,819,558 (thus reducing governmental activities Net Position by the same amount). The second prior period adjustment was the correction of an error that overstated Emergency Medical Services (EMS) revenue and accounts receivable. This adjustment had the effect of reducing EMS accounts receivable by $1,078,551 (thus reducing business-type activities Net Position by the same amount). All statements and tables that present 2017 data throughout this Management’s Discussion and Analysis have been adjusted to reflect these restatements. More information on these prior period adjustments can be found in Note 21 to the Financial Statements. • Government-wide net position was $368,793,609 as of December 31, 2018. • Government-wide net position increased by $17,075,921 or 4.9% during fiscal 2018. Governmental activity net position increased by $9,701,852 or 6.5% and business-type activity net position increased by $7,374,069 or 3.6% during fiscal 2018. On an overall basis, the City is better off financially at December 31, 2018 than it was at December 31, 2017 on a government-wide financial basis. The primary reason is that the City received higher than expected income taxes and property taxes in 2018, as well as several large, one-time revenues (primarily operating and capital grants). In addition, investment earnings in 2018 were significantly higher than in 2017. These higher than expected revenues led to an increase in cash assets in governmental activities. Additionally, a reduction in liabilities in business-type activities that stemmed mainly from short-term Accounts Payable and paying down long-term revenue bonds helped improve Government-Wide Net Position. Finally, the City saw a marked decrease in pension liability related to both the 1925 Police Pension Fund and the 1937 Firefighter’s Pension Fund.

• Total assets and deferred outflows of resources as of December 31, 2018 of $859,889,526 increased by $3,167,496 or 0.4% as compared to total assets and deferred outflows of resources as of December 31, 2017. The increase is primarily attributable to an increase in governmental activities cash, stemming from higher-than-expected property taxes, income

5 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

taxes, and investment income (as well as certain one-time revenue sources) for the 2018 fiscal year.

• Total liabilities and deferred inflows of resources as of December 31, 2018 of $491,095,917 decreased by $13,908,425 or 2.8% as compared to total liabilities and deferred inflows of resources as of December 31, 2017. This decrease was driven by a reduction in liabilities in business-type Activities, stemming mainly from short-term Accounts Payable and paying down long-term revenue bonds, in addition to a significant decrease in pension liability related to both the 1925 Police Pension Fund and the 1937 Firefighter’s Pension Fund.

• As of December 31, 2018, the government-wide net position of $368,793,609 has $289,245,831 invested in capital assets (net of debt) which is not available for spending, $45,189,224 classified as restricted for debt service; capital outlay; and other; and $34,358,555 classified as unrestricted.

• Government-wide revenue received in fiscal 2018 totaled $247,737,447, an increase of $15,929,924 or 6.9% versus government-wide revenue received in fiscal 2017. Governmental activity revenue increased by $13,412,589 or 8.6%, and business-type activity revenue increased by $2,517,335 or 3.3%. Governmental activity revenue increases are due mainly to increases in overall property taxes and income taxes, as well as certain one-time revenue sources. The increase in the business-type activity revenue is due mainly to significant increases in Water Utility and Wastewater Utility revenue, but is offset somewhat by a slight decrease in Emergency Medical Services (EMS) revenue.

• Government-wide expenses in 2018 totaled $230,661,526, a decrease of $901,880 or 0.4% compared to expenses of $231,563,406 in 2017. Government activity expenses increased by $4,360,432 or 2.7%, while business-type activity expenses decreased by $5,262,312 or 7.4% compared to fiscal 2017. The increase in the governmental activity expenses are due primarily to increases in investment in Public Safety, Economic Development, and the City’s Parks and Venues. These increases include increased cost of maintenance as well as raises in salary across bargaining and non-bargaining employees. The decrease in the business- type activities is due mainly to a decrease in costs of the Wastewater Utility, which had unusually high maintenance costs in 2017, and in 2018 saw costs that are closer to the five- year average. Explanatory commentary concerning the changes in assets, liabilities, revenue and expenditures can be found in later sections of this MD&A. Overview of the Financial Statements The City of South Bend’s financial statements are comprised of three components: (1) government-wide financial statements, (2) fund financial statements, and (3) notes to the financial statements. This report also includes other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City of South Bend’s finances using “accrual-based accounting,” a method of accounting used by private sector businesses.

6 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

• Statement of Net Position This statement reports all assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the City of South Bend as of December 31, 2018. The difference between total assets and deferred outflows of resources less total liabilities and deferred inflows of resources is reported as “net position,” and can generally be thought of as the net worth of the City. Increases in net position generally indicate an improvement in financial position while decreases in net position may indicate a deterioration of financial position. • Statement of Activities This statement serves the purpose of the traditional income statement. It provides consolidated reporting of the results of all activities of the City of South Bend for the year ended December 31, 2018. Changes in net position are recorded in the period in which the underlying event takes place, which may differ from the period in which cash is received or disbursed. The statement of activities displays the expense of the City’s various programs net of the related revenues, as well as a separate presentation of revenue available for general purposes including property and local income taxes, fees for services and other revenue sources. The government-wide financial statements distinguish between functions of the City that are principally supported by taxes and intergovernmental revenue (governmental activities) and other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The major governmental activities of the City of South Bend include general government, public safety, street construction and maintenance, infrastructure construction and maintenance, parks and recreation services, and arts and culture. The major business-type activities of the City include the water utility, wastewater utility, solid waste sanitation services, Century Center convention center, Building Department, emergency medical services and the downtown parking garages. Fund Financial Statements A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of South Bend can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Each fund has its own cash balance which must be maintained according to the City’s cash reserve policy. Governmental Funds Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike government-wide financial statements, governmental fund financial statements focus on short-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's short-term financing requirements. Governmental funds use the modified accrual accounting method. The City maintains seven (7) major governmental funds (General, Parks and Recreation, Public Safety Local Option Income Tax (LOIT), County Option Income Tax (COIT), Economic Development Income Tax (EDIT), Rainy Day, and River West TIF) and seventy (70) non-major governmental funds.

7 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

Proprietary Funds The City of South Bend maintains two types of proprietary funds: enterprise and internal service. • Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City maintains seven (7) enterprise funds. Information is presented separately in the proprietary statement of net position and the proprietary statement of revenues, expenses and changes in fund net position for the water utility, wastewater utility and Century Center, which are considered major enterprise funds. Data from the other four (4) nonmajor enterprise funds (Consolidated Building Department, Parking Garage, Solid Waste, and Emergency Medical Services) are combined into a single, aggregated presentation. Individual fund data for each of these non-major enterprise funds is provided in the form of combining statements elsewhere in this report. • Internal service funds are used to accumulate and allocate costs internally among the City's various functions and funds. The City maintains seven (7) internal service funds. The City of South Bend uses internal service funds to account for its self-funded liability insurance program, self-funded employee health benefits program, unemployment compensation claims, police take-home vehicle program, Innovation & Technology and 311 call center, parental leave benefit for City employees, and central services unit (a department that accounts for expenses related to fuel, vehicle repairs, printing and other services provided to City departments on a cost-reimbursement basis). Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements but are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in the report. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the City government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support City programs. The City maintains seven (7) fiduciary funds, which consist of two (2) pension trust funds (1925 Police Officers’ Pension and 1937 Firefighters’ Pension), three (3) agency funds (Payroll, Police Distributions Payable and Morris/Palais Royale Box Office), and two (2) private-purpose trust fund (City Cemetery and Bowman Cemetery). Pension Trust Fund Operations City employees are covered by the Public Employees Retirement Fund (PERF) and the 1977 Police Officers' and Firefighters' Pension Fund, both of which are administered by the State of Indiana. However, certain police officers and firefighters hired before May 1, 1977 (who did not opt into the 1977 fund) continue to be members of the 1925 Police Officers’ Pension Fund or the 1937 Firefighters' Pension Fund. These two funds are administered by the City. The number of police officers and firefighters in the City-managed pension trust funds will continue to decline in the future as current participants pass away. The State makes certain contributions toward the funding of the 1925 Police Officers’ and 1937 Firefighters’ pension plans.

8 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

Notes to the Financial Statements The notes to the financial statements provide additional information that is essential in order to have a full understanding of the data provided in the government-wide and fund financial statements. Other Information In addition to the basic financial statements and accompanying notes and disclosures, this CAFR presents supplementary information (“Required Supplementary Information” or “RSI”) immediately following the basic financial statements. Other supplementary information is found in the Statistical Section. The combining statements referred to earlier in connection with non-major governmental, non-major enterprise, internal service and fiduciary funds are presented immediately after the Required Supplementary Information within the financial statement section of the CAFR. Government-wide Financial Statements The following financial analysis will focus on the statement of net position and statement of changes in net position of the City’s governmental and business-type activities. Statement of Net Position

Governmental Activities Business-type Activities Government-wide 2018 2017 2018 2017 2018 2017 Assets Current and other $ 266,601,477 $ 249,677,530 $ 71,059,755 $ 67,013,444 $ 337,661,232 $ 316,690,974 Capital assets (net) 266,077,813 267,778,947 238,478,887 243,793,487 504,556,700 511,572,434 Total Assets 532,679,290 517,456,477 309,538,642 310,806,931 842,217,932 828,263,408

Deferred Outflows 15,921,777 26,446,186 1,749,817 2,012,436 17,671,594 28,458,622

Liabilities Current 8,324,537 12,896,073 4,493,137 17,960,166 12,817,674 30,856,239 Long-term 362,740,661 367,546,469 96,061,945 91,403,011 458,802,606 458,949,480 Total Liabilities 371,065,198 380,442,542 100,555,082 109,363,177 471,620,280 489,805,719

Deferred Inflows 19,427,720 15,053,824 47,917 144,799 19,475,637 15,198,623

Total Net Position $ 158,108,149 $ 148,406,297 $ 210,685,460 $ 203,311,391 $ 368,793,609 $ 351,717,688

• As of December 31, 2018, total assets and deferred outflows exceeded liabilities and deferred inflows by $368,793,609, an increase of $17,075,921, or 4.9%, from the net position level as of December 31, 2017.

• Governmental activities net position of $158,108,149 increased by $9,701,852, or 6.5%, from December 31, 2017.

• Business-type net position of $210,685,460 increased by $7,374,069, or 3.6%, from December 31, 2017. The increase in business-type net position was due primarily to significantly lower expenses in the Wastewater Utility.

9 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

• Government-wide assets and deferred outflows increased by $3,167,496 or 0.4% as compared to total assets and deferred outflows of resources as of December 31, 2017. This is primarily due to higher than expected income taxes and property taxes in 2018, as well as several large, one-time revenues (primarily operating and capital grants). In addition, investment earnings in 2018 were significantly higher than in 2017.

• Total liabilities and deferred inflows of resources as of December 31, 2018 of $491,095,917 decreased by $13,908,425 or 2.8% as compared to total liabilities and deferred inflows of resources as of December 31, 2017. This decrease was primarily due to a significant decrease in pension liability related to both the 1925 Police Pension Fund and the 1937 Firefighter’s Pension Fund.

Statement of Changes in Net Position

Governmental Activities Business-type Activities Government-wide 2018 2017 2018 2017 2018 2017 Revenue Program revenue Charges for services $ 6,476,043 $ 8,541,200 $ 75,940,019 $ 73,036,361 $ 82,416,062 $ 81,577,561 Operating grants 26,248,738 11,828,681 278,112 - 26,526,850 11,828,681 Capital grants 4,100,000 1,000,000 - 1,170,970 4,100,000 2,170,970

General revenue Taxes Property tax 80,155,902 78,266,107 - - 80,155,902 78,266,107 Other tax 33,527,962 28,527,005 1,275,000 1,275,000 34,802,962 29,802,005 Unrestricted grants 4,819,125 17,160,034 - - 4,819,125 17,160,034 Investment earnings 3,304,646 1,687,888 1,088,896 578,773 4,393,542 2,266,661 Other revenue 10,523,004 8,731,916 - 3,588 10,523,004 8,735,504 Total Revenue 169,155,420 155,742,831 78,582,027 76,064,692 247,737,447 231,807,523

Expenses General government 12,654,430 16,750,853 - - 12,654,430 16,750,853 Public safety 69,209,163 71,656,865 - - 69,209,163 71,656,865 Highways and streets 17,223,378 21,716,658 - - 17,223,378 21,716,658 Culture and recreation 26,076,331 19,332,902 - - 26,076,331 19,332,902 Economic development 33,801,755 26,326,989 - - 33,801,755 26,326,989 Interest on long-term debt 5,718,172 4,538,530 - - 5,718,172 4,538,530 Water utility - - 14,788,847 14,902,682 14,788,847 14,902,682 Wastewater utility - - 25,744,139 32,548,087 25,744,139 32,548,087 Civic center - - 5,287,797 5,121,336 5,287,797 5,121,336 Building department - - 4,136,837 3,704,963 4,136,837 3,704,963 Parking - - 1,565,351 1,177,363 1,565,351 1,177,363 Solid waste - - 5,467,986 5,169,128 5,467,986 5,169,128 Emergency medical services - - 8,987,340 8,617,050 8,987,340 8,617,050 Total Expenses 164,683,229 160,322,797 65,978,297 71,240,609 230,661,526 231,563,406

Change in net position Before transfers 4,472,191 (4,579,966) 12,603,730 4,824,083 17,075,921 244,117 Transfers 5,229,661 4,123,183 (5,229,661) (4,123,183) - -

Change in net position 9,701,852 (456,783) 7,374,069 700,900 17,075,921 244,117

Beginning net position 148,406,297 148,863,080 203,311,391 202,610,491 351,717,688 351,473,571

Ending net position $ 158,108,149 $ 148,406,297 $ 210,685,460 $ 203,311,391 $ 368,793,609 $ 351,717,688

10 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

Governmental Activities Net position for governmental activities increased by $9,701,852 during fiscal 2018, an increase of 6.5% from the balance of Net Position at December 31, 2017. Revenue of $169,155,420 increased by $13,412,589, or 8.6%. Expenses were $164,683,229 during 2018, an increase of $4,360,432, or 2.7% as compared to fiscal 2017.

The governmental activities revenue increases were due primarily to higher property tax and income tax revenue during 2018 resulting from an increase in assessed property values and an improving local economy. In addition, the City received several grants and one-time revenues, including a $4.5 million payment from the Indiana Department of Transportation, meant to help maintain a portion of a state road in South Bend. Finally, investment revenues increased dramatically in 2018, spurred by a larger asset pool in the investment portfolio and strong market performances. Governmental activities expenses increased significantly in 2018, however, were closer in line with 2015 expenditures due to a decrease in net pension liability and deferrals in public safety in 2017. Business-type Activities Net position from business-type activities increased by $7,374,069 during fiscal 2018, an increase of 3.6% from the balance of Net Position at December 31, 2017. During 2018, business-type activities revenue of $78,582,027 increased by $2,517,335, or 3.3%, over fiscal 2017. During 2018, business-type activities expenses of $65,978,297 decreased by $5,262,312, or 7.4%, when compared to fiscal 2017. These changes are due primarily to decreased costs in the Wastewater Utility, as well as slightly higher charges for services. Financial Analysis of Government Funds The City of South Bend uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Funds of the City are divided into three categories: governmental funds, proprietary funds and fiduciary funds.

11 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

Condensed Balance Sheet, Statement of Revenue, Expenditures, and Changes in Fund Balance As of December 31, 2018

General Parks and Public Safety River West Nonmajor Fund Recreation LOIT COIT EDIT Rainy Day TIF Funds Total

Total assets $ 39,838,416 $ 8,352,628 $ 1,959,261 $ 12,458,849 $ 15,409,467 $ 10,468,726 $ 39,206,614 $ 116,862,109 $ 244,556,070

Total liabilities 1,208,616 957,167 122,184 823,457 142,947 - 1,198,128 6,724,841 11,177,340

Fund Balances Nonspendable 425,680 22,322 ------448,002 Restricted - 7,373,139 1,837,077 - - - 38,008,486 105,590,419 152,809,121 Committed ------3,209,500 3,209,500 Assigned 820,914 - - 11,635,392 15,266,520 10,468,726 - 1,337,349 39,528,901 Unassigned 37,383,206 ------37,383,206 Total fund balances $ 38,629,800 $ 7,395,461 $ 1,837,077 $ 11,635,392 $ 15,266,520 $ 10,468,726 $ 38,008,486 $ 110,137,268 $ 233,378,730

Total liabilities and fund balances 39,838,416 8,352,628 1,959,261 12,458,849 15,409,467 10,468,726 39,206,614 116,862,109 244,556,070

Revenues 66,038,255 13,165,767 8,510,392 12,698,644 12,707,675 187,321 23,222,559 32,624,807 169,155,420 Expenditures 69,653,063 14,640,183 7,553,570 10,102,944 4,351,842 - 18,106,582 61,791,814 186,199,998 Net Surplus (deficit) (3,614,808) (1,474,416) 956,822 2,595,700 8,355,833 187,321 5,115,977 (29,167,007) (17,044,578)

Other sources (uses) 6,778,348 2,717,799 - (259,134) (5,976,478) - (4,220,378) 34,151,963 33,192,120 Net Change in Fund Balances 3,163,540 1,243,383 956,822 2,336,566 2,379,355 187,321 895,599 4,984,956 16,147,542

Beginning Fund Balances 35,466,260 6,152,078 880,255 9,298,826 12,887,165 10,281,405 37,112,887 105,152,312 217,231,188

Ending Fund Balances $ 38,629,800 $ 7,395,461 $ 1,837,077 $ 11,635,392 $ 15,266,520 $ 10,468,726 $ 38,008,486 $ 110,137,268 $ 233,378,730

As of December 31, 2018, the City governmental funds reported a combined ending fund balance of $233,378,730.

The nonspendable fund balance of $448,002 is sequestered for property held for resale, inventory, and long-term receivables in the General Fund and inventory in other funds. It is, therefore, not available for new spending. The restricted fund balance of $152,809,121 consists of monies in debt service funds or other funds such as road and tax increment financing funds that are limited by external parties as to their use. The committed fund balance of $3,209,500 is designated by the South Bend Common Council or South Bend Redevelopment Commission to be used for certain purposes such as for economic development projects. The assigned fund balance of $39,528,901 includes balances in local option income tax funds that have not been committed to certain projects and are available for spending by the City. The remaining unassigned fund balance of $37,383,206 consists of money in the General Fund that has not been obligated in any manner by the City less deficits in certain non-major governmental funds due primarily to interfund advance transactions to finance economic development projects that will be paid back over time.

The General Fund is the primary operating fund for City operations including general government, public safety, certain culture and recreation expenses, and certain debt service obligations.

As of December 31, 2018, the General Fund balance of $38,629,800 represents an increase of $3,163,540, or 8.2% from the balance as of December 31, 2017. The increase was due primarily to higher property tax revenue during 2018 than expected and lower spending for public safety and administration than anticipated.

As of December 31, 2018, the General Fund had an unassigned fund balance of $37,383,206 which is equal to 53.7% of 2018 General Fund expenditures.

12 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

The General Fund unassigned fund balance has traditionally been used by the City to fund certain capital projects and emergency contingencies. In addition, the City used the unassigned fund balance in 2018 as a cash flow bridge to the receipt of property tax revenues from the County collection authority which distributes property tax revenue twice per year (June and December). The General Fund unassigned balance provided sufficient cash to cover City operating obligations without incurring tax anticipation notes and resultant borrowing costs during fiscal 2018.

As discussed in Governmental Accounting, Auditing, and Financial Reporting (GAAFR), a General Fund unassigned fund balance should be either 1) no less than 5 to 15 percent of regular General Fund operating revenues, or 2) no less than one to two months of regular General Fund operating expenditures. An unassigned fund balance may be higher if circumstances dictate, such as a delay in collection of a major revenue source. The City has a policy to maintain fund reserves equal to at least 35% of annual expenditures and exceeded this target at December 31, 2018.

The Parks and Recreation Fund balance increased $1,243,383 during fiscal 2018, due primarily to the consolidation of several Parks Funds into a single fund, as well as higher than expected property tax revenue. As of December 31, 2018, the fund balance in the Parks and Recreation Fund was $7,395,461, or 50.5% of 2018 expenditures. The City has a policy to maintain fund reserves equal to at least 25% of annual expenditures and exceeded this target at December 31, 2018.

The Public Safety Local Option Income Tax Fund (Public Safety LOIT) was created in October 2009, with the local legislative passage of an increase in local option income taxes of 0.95%, a part of which (0.25%) tax increase was established to fund public safety expenditures. The City has established the Public Safety LOIT Fund as a major governmental fund, due solely to its purpose of creating a funding source to sustain public safety staffing levels, which were compromised by state implementation of property tax reform that has reduced property tax revenues, which historically are the source of public safety funding. Public Safety LOIT funds are used to cover the personnel costs of police officers and firefighters. Receipts of Public Safety LOIT tax revenue commenced in January 2010. The increase in fund balance in the amount of $956,822 during 2018 was due to increased revenue for this fund for police and fire personnel. The ending fund balance was $1,837,077, or 24.3% of annual expenditures.

The County Option Income Tax Fund (COIT) and Economic Development Income Tax Fund (EDIT) funds are used to fund major capital and construction projects, economic development initiatives, certain subsidies and support to organizations and units that benefit city economic development and cultural venues, certain city-wide expenditures such as major technology costs, and certain debt service payments.

The COIT fund balance increased by $2,336,566 during 2018, due to one-time capital projects and prior year encumbrances. The City has operationally sequestered COIT funds for use in major capital and construction funding initiatives, certain subsidies and support to organizations and units that benefit city economic development and cultural venues, city-wide expenditures like telephone and electricity for street lights, and certain debt service payments.

As of December 31, 2018, the COIT Fund balance was $11,635,392, or 115.2% of 2018 expenditures and transfers out. This level of fund reserves is significantly higher than the City policy target of 50%.

13 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

The EDIT Fund balance increased by $2,379,355 during 2018 due to lower than anticipated expenses related to initiatives of the Department of Community Investment. The City has operationally sequestered EDIT funds for use in major economic development initiatives, certain subsidies and support to organizations and units that benefit city economic development and cultural venues, operational costs of the street, code enforcement and community investment departments and certain debt service payments.

As of December 31, 2018, the EDIT fund balance was $15,266,520, or 350.8% of 2018 expenditures and transfers out. The City policy target is 50%.

The Rainy Day Fund is used to account for unused and unencumbered funds that are transferred from a fund that has a tax levy. Revenues in this fund also include special distributions of county option income tax and county economic development income tax. The ending fund balance at December 31, 2018 was $10,468,726 or 4.5% of government-wide expenses during 2018, and meets the City’s cash reserve policy goal of 3%.

The fund balance in the River West TIF Fund increased by $895,599 during 2018. This change was the result of higher than expected TIF revenue in this fund.

As of December 31, 2018, the River West TIF Fund balance of $38,008,486. This fund continues to be a major success for the City of South Bend.

During 2018, the fund balances in non-major governmental funds increased by $4,984,956 due primarily to large one-time payments that the City received in 2018 and do not expect to continue in the future.

The total balance in non-major governmental funds was $110,137,268 at December 31, 2018. These fund balances provide the necessary resources that the City requires to meet future capital construction needs, ongoing debt service obligations, and economic development project initiatives in order to fuel community growth within the City.

Individual fund data for each of the non-major governmental funds is provided in the form of the combining statements immediately following the Required Supplemental Information within the Financial Section of the CAFR.

Governmental Fund Revenue The following schedule presents a summary of governmental fund revenue for the year ended December 31, 2018 with comparison to the prior year:

14 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

2018 Actual % of Total 2017 Actual % of Total Tax Based General property $ 80,155,902 47.4%$ 78,266,107 50.3% Local income tax 3 2,911,525 19.5% 28,179,750 18.1% Hotel/motel tax 616,437 0.3% - 0.0% Professional sports development - 0.0% 347,255 0.2% Total Tax 113,683,864 67.2% 106,793,112 68.6%

Non-Tax Based Licenses and permits 245,956 0.1% 231,260 0.1% Intergovernmental 35,167,863 20.8% 29,634,896 19.0% Charges for services 5,735,251 3.4% 7,020,575 4.5% Fines and forfeitures 494,836 0.3% 562,466 0.4% Interest income 3,304,646 2.0% 1,687,888 1.1% Other 10,523,004 6.2% 9,812,634 6.3% Total Non-Tax Based 55,471,556 32.8% 48,949,719 31.4%

Total Revenue $ 169,155,420 100.0%$ 155,742,831 100.0%

Tax revenue continues to represent the most significant source of revenue required to support services provided by the City. Property tax revenue is the primary source of funding for governmental expenditures. Property tax revenue is based on a relationship between two variables. The first variable is the net assessed property valuation of industrial, commercial and residential parcels for both real and personal property. The second variable is the application of a tax rate to arrive at the total tax levy. Taxable property is assessed at 100% of the true tax value. The amount of property tax levied (billed to property owners) is further restricted by State of Indiana-enacted property tax legislative reform, the so-called “circuit breaker” property tax caps in 2009, to no more than 1.0% (homestead), 2.0% (other residential/rental) or 3.0% (commercial/industrial) of gross assessed valuation. Property tax revenue includes taxes collected on behalf of the following funds: General Fund, Parks and Recreation Fund, Cumulative Capital Development Fund, Redevelopment Commission tax increment financing (TIF) Funds, Excess Levy Fund, and a special levy to cover debt service related to the City's MySB Parks and Trails projects. The City recognizes the need to further diversify the revenue stream and to reduce its dependency on general property taxes to ensure that a broad base of users of city services, including nonresidents who work in the City, share in the funding of basic City services. As a result of the need to diversify the revenue stream, the City of South Bend Common Council and Saint Joseph County Council adopted an additional local option income tax of 0.95% during 2009, increasing the tax rate from 0.8% to 1.75%. The local option income tax increase consisted of three components: 0.2% increase in the economic development income tax, a 0.25% public safety local option income tax and a 0.5% property tax relief local option income tax. The property tax relief local option income tax does not result in any direct revenue to the City but helps to reduce circuit breaker property tax losses. The City continues to seek diversified sources of revenue that will reduce its reliance on property and income taxes. The City has supported efforts of the Accelerating Indiana Municipalities (AIM) “Hometown Matters” to lobby the state legislature to enable alternative revenue sources that best fit the needs of the community. One viable source of revenue is from user fees and/or charges for services currently being performed. City-performed services are priced at levels representing the full cost of service, taking into consideration fees charged by providers of similar services. The City performs ongoing reviews of user fee costs incurred

15 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

and revises service fee prices as required. Total tax revenue was $113,683,864 during 2018 and increased by $6,890,752, or 6.4%, from 2017. This increase was driven by an increase in normal tax distributions due to the continuing improvement in the overall economy as well as a one-time distribution in Local Income Tax revenue that occurred in 2018. Total non-tax based revenue was $55,471,556 and increased $6,521,837, or 13.3%, from 2017. This is due primarily to an increase in intergovernmental revenue from charging administrative allocations to operational departments. Governmental Fund Expenditures The City accounts for government fund expenditures in eight functional categories as follows: (1) general government, (2) public safety, (3) highways and streets, (4) community and economic development, (5) culture and recreation, (6) bond issuance costs (7) debt service, and (8) capital outlay. The following schedule presents a summary of governmental fund expenditures for the year ended December 31, 2018, with comparison to fiscal year 2017.

2018 Actual % of Total 2017 Actual % of Total General government $ 12,763,226 6.9% $ 14,221,015 8.1% Public safety 75,530,051 40.6% 72,010,182 41.3% Highways and streets 16,906,126 9.1% 13,600,140 7.8% Community and economic development 22,179,273 11.9% 20,622,330 11.8% Culture and recreation 16,597,764 8.9% 15,904,306 9.1% Debt service 18,983,039 10.2% 21,148,721 12.1% Capital outlay 23,240,519 12.5% 17,035,543 9.8%

Total Expenditures $ 186,199,998 100.0% $ 174,542,237 100.0%

Government fund expenditures in fiscal 2018 of $186,199,998 increased by $11,657,761, or 6.7%, in comparison to government fund expenditures in fiscal 2017.

Capital outlay expenditures increased by $6,204,976 or 36.4% during 2018 due primarily to increased expenditures in the River West TIF. Additionally, the City kicked off its “MySB Parks and Trails” initiative in 2018, which represents a significant capital investment in the City’s parks, and will continue into 2019.

Public safety expenditures continue to be the primary use of government fund resources with 40.6% of expenditures used for this purpose in fiscal 2018. Public safety spending is followed by capital outlay expenditures (12.5%), community and economic development (11.9%), debt service (10.2%), highways and streets (9.1%), culture and recreation (8.9%), and general government (6.9%). General government spending is comprised of the executive offices of the Mayor, Common Council, City Clerk, Legal Department, Administration and Finance Department, and other administrative functions. Overall governmental expenditures increased during 2018, in part due to increases in public safety wages and benefits occurring in conjunction with a four-year collective bargaining agreement with the fraternal order of police. General governmental expenditures decreased during 2018 due to the transfer of technology costs to an internal service fund.

16 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

Proprietary funds Condensed Statement of Net Position Revenue, Expenses, and Changes in Fund Net Position As of December 31, 2018

Governmental Enterprise Funds Activities Wastewater Nonmajor Proprietary Water Utility Utility Century Center Enterprise Total Enterprise Internal Service

Total assets $ 69,762,293 $ 193,216,274 $ 19,735,573 $ 26,843,623 $ 309,557,763 $ 24,247,609 Total deferred outflows 78,870 1,670,947 - - 1,749,817 -

Total liabilities 19,631,428 69,726,504 302,300 10,913,971 100,574,203 5,686,800 Total deferred inflows - - 47,917 - 47,917 -

Net Position Net investment in capital assets 37,134,241 86,894,283 17,034,295 4,900,525 145,963,344 1,252,541 Restricted: - Depreciation fund ------Debt service fund 1,726,068 963,678 - - 2,689,746 - Customer repair and deposit fund 1,503,325 2,014,803 - - 3,518,128 - Cash with fiscal agent 32,903 77,844 - 126,758 237,505 - Bond reserve fund 1,390,019 4,204,246 - - 5,594,265 - Operating reserve fund 2,663,671 5,385,946 - - 8,049,617 - Capital outlay fund 1,888,226 9,100,782 857,363 2,001,063 13,847,434 - Unrestricted 3,871,282 16,519,135 1,493,698 8,901,306 30,785,421 17,308,268

Total net position $ 50,209,735 $ 125,160,717 $ 19,385,356 $ 15,929,652 $ 210,685,460 $ 18,560,809

Operating revenues 16,767,283 39,931,429 3,258,017 15,567,113 75,523,842 36,587,847 Operating expenses 13,778,933 23,555,202 5,287,797 18,762,236 61,384,168 35,500,644 Operating income (loss) 2,988,350 16,376,227 (2,029,780) (3,195,123) 14,139,674 1,087,203

Non-operating revenue (expenses) (791,589) (1,507,132) 1,277,020 (1,179,084) (2,200,785) 324,570

Income (loss) before contributions and transfers 2,196,761 14,869,095 (752,760) (4,374,207) 11,938,889 1,411,773

Capital contributions 386,729 - 278,112 - 664,841 - Transfers in - 368,196 - 1,069,457 1,437,653 - Transfers Out (1,730,831) (4,601,656) (85,909) (248,918) (6,667,314) (439,139)

Change in net position 852,659 10,635,635 (560,557) (3,553,668) 7,374,069 972,634

Total net position - beginning 49,357,076 114,525,082 19,945,913 19,483,320 203,311,391 17,588,175

Total net position - ending $ 50,209,735 $ 125,160,717 $ 19,385,356 $ 15,929,652 $ 210,685,460 $ 18,560,809

The City maintains two types of proprietary funds: enterprise and internal service. The City maintains seven (7) enterprise funds. Information is presented separately in the Proprietary Statement of Net Position, the Proprietary Statement of Revenues and Expenditures, and Changes in Fund Net Position for the Water Utility, Wastewater Utility and Century Center, which are considered major enterprise funds. Data from the other four (4) non-major enterprise funds (Consolidated Building Department, Parking Garage, Solid Waste, and Emergency Medical Services) are combined into a single, aggregated presentation. The City maintains seven (7) internal service funds. The City uses internal service funds to account for its self-funded liability insurance program, self-funded employee health benefits program, unemployment compensation claims, police take-home vehicle insurance program,

17 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

Innovation & Technology and 311 call center, parental leave benefit for City employees, and central services unit (a department that accounts for expenses related to fuel, vehicle repairs, printing and other services provided to City departments on a cost-reimbursement basis). Because these services predominantly benefit governmental rather than business- type functions, they have been included within governmental activities in the government-wide financial statements but are combined into a single, aggregated presentation in the proprietary fund financial statements. As of December 31, 2018, City enterprise funds reported a net position of $210,685,460, an increase of $7,374,069, or 3.6%, from the net position at December 31, 2017. At December 31, 2018, proprietary fund net position includes net investment in capital assets of $145,963,344, restricted net position of $33,936,695 and unrestricted net position of $30,785,421. During 2018, the water utility experienced an increase in net position of $852,659 and the wastewater utility experienced an increase in net position of $10,635,635. The Water utility experienced increased operating revenues of $1,483,958 while the Wastewater utility experienced an increase in operating revenue of $1,137,217. This was primarily due to a 22% rate increase in water rates that was approved by the South Bend Common Council in 2017 and went into effect in 2018. During 2018, Century Center experienced a decrease in net position of $560,557. The Century Center is nearly always operating at a slight loss, and this decrease in net position was smaller than in previous years and better than projected. Non-major enterprise funds experienced a decrease in net position of $3,553,668 during 2018. The Parking Garage Fund reported a decrease in net position of $218,330 primarily as the result of higher than expected maintenance costs. The Consolidated Building Fund reported a decrease in net position of $1,000,340 during 2018 as the result of unreimbursed activity by the Code Enforcement department in this fund. The Solid Waste Fund reported a decrease in net position of $11,923 and continues to accumulate capital lease debt to finance new trash trucks. Emergency Medical Service reported a decrease in net position of $2,323,075 as a result of continually declining reimbursement for ambulance services, especially with respect to Medicaid patients. Internal service funds reported net position of $18,560,809 at December 31, 2018, an increase of $972,634, or 5.5%, compared to net position at December 31, 2017. The Liability Insurance Fund decreased its net position by $1,886,271 in 2018 as the result of relatively high worker’s compensation claims. The Central Services Fund decreased its net position by $277,196. The Self-Funded Employee Benefits Fund had an increase in its net position of $2,123,148 due to modest growth in medical insurance claims relative to employer charges per full-time equivalent (FTE). In January 2016, the City opened the Activate Health and Wellness Center for the benefit of employees and their families and to control future health care cost increases. The Innovation & Technology and 311 Call Center fund is a fully allocated fund which supports most city departments. The Innovation & Technology and 311 Call Center Fund had a net position of $2,304,183 at December 31, 2018, an increase of $981,145 over the end of 2017. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. The City maintains six fiduciary funds, which consist of two pension trust funds

18 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

(1925 Police Officers’ Pension and 1937 Firefighters’ Pension), two private-purpose trust funds (City Cemetery and Bowman Cemetery) and three agency funds (Payroll, Police Distributions Payable and Morris/Palais Royale Box Office).

Private Purpose Pension Trust Trust Agency

Total assets $ 1,265,530 $ 485,158 $ 3,389,966 Total liabilities 793 - 3,389,966

Total net position $ 1,264,737 $ 485,158 $ -

Total additions 10,734,007 31,889 - Total deductions 10,820,844 - -

Changes in net position $ (86,837) $ 31,889 $ -

Effective in fiscal 2009, with the passage of State legislation, the State of Indiana began making contributions to the 1925 Police Officers’ and 1937 Firefighters’ Pension Funds. These funds no longer receive property tax revenue distributions beyond fiscal 2009. The administration of the pension plans is the responsibility of the City. The net position maintained in the pension trust is the result of timing differences in the payment of pension benefits and the contributions received from the State of Indiana (the State reimburses in June and September for expenses paid in the previous calendar year). The cost of healthcare benefits to pension members are not covered by State contributions. In 2016, the regular Fire Department budget paid retiree health care costs while this change occurred in 2017 for the Police Department. The 1925 Police Officers’ and 1937 Firefighters’ pension funds will no longer pay retiree health insurance costs; these costs will be paid from the regular police and fire departments' operating budgets. General Fund Budgetary Highlights The City prepares an annual budget for General Fund expenditures, which is subject to City of South Bend Common Council approval for adoption, before November 1 of the year preceding the budget period, according to state statute concerning the annual budget of second class cities and towns. The Common Council adopted the 2018 budget at its meeting held in October 2017. The General Fund budget applicable for fiscal 2018 is reported as follows:

Actual Budgetary Original Final Ba sis Variance

Revenue / transfers in $ 60,006,889 $ 62,738,612 $ 62,146,619 $ (591,993) Expenditures / transfers out 59,917,756 62,100,216 59,453,858 $ 2,646,358

Surplus (Deficit) $ 89,133 $ 638,396 $ 2,692,761 $ 2,054,365

19 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

General Fund revenue/transfers in was originally budgeted at $60,006,889 for fiscal 2018. During the year, the General Fund revenue/transfers in budget was increased by $2,731,723 to $62,738,612. The budget may be increased or decreased at any time based on updated revenue projections. The revenue/transfers in budget was increased primarily due to an increase in the property tax estimate because of higher collections than anticipated. During 2018, the General Fund collected $62,146,619 in revenue/transfers in on a budgetary basis, which was $2,139,730 higher than the original budget. This difference is 3.6% more than the original budget. This increase over budget is due mainly to higher than budgeted property tax receipts in 2018. General Fund expenditures/transfers out were originally budgeted at $59,917,756 for fiscal 2018. During the year, the General Fund expenditure/transfers out budgets were increased by $2,182,460 to $62,100,216. Additional appropriations were passed for Fire Department equipment and other purposes. Carry forward of unspent encumbrances from 2017 also increased the 2018 amended budget.

General Fund spending is reviewed on a monthly basis under the direction of the City Controller to ensure spending remains within budgetary constraints. Monthly reviews are conducted as required with General Fund department management to review spending projections to ensure that annual expenditures remain within the budgetary levels. Budget amendments for cost-neutral redistribution between expense categories (i.e., personnel, supplies, services, capital) were submitted to Common Council four times during 2018, as required to adjust the budget to prevent any budget overruns in any expenditure category.

Additional appropriations for projects, initiatives, or unbudgeted spending requirements within the General Fund are presented to the Common Council for adoption as deemed necessary by the Mayor. General Fund expenditures/transfers out incurred on a budgetary basis, including cash expended and outstanding encumbrances as of year-end December 31, 2018, amounted to $59,453,858. The expenditures/transfers out and commitments as of year-end December 31, 2018, are less than the 2018 amended General Fund budget by $2,646,358 or 4.26%. The largest savings were in the police and administration/finance department budgets as personnel and other costs spent were less than budgeted due to position vacancies and other factors.

20 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

Capital Assets and Debt Administration

Statement of Capital Assets

Governmental Activities Business-type Activities Government-wide 2018 2017 2018 2017 2018 2017 Assets not depreciated Land $ 14,496,141 $ 14,707,088 $ 2,614,014 $ 2,614,014 $ 17,110,155 $ 17,321,102 Construction in progress 18,009,789 29,957,697 17,841,033 21,254,911 35,850,822 51,212,608 Total 32,505,930 44,664,785 20,455,047 23,868,925 52,960,977 68,533,710

Assets depreciated Buildings 120,384,084 125,886,853 83,425,676 83,233,461 203,809,760 209,120,314 Non-building improvements 21,052,069 21,519,259 26,873,450 27,939,323 47,925,519 49,458,582 Machinery and equipment 48,608,151 47,094,150 43,574,154 42,205,000 92,182,305 89,299,150 Roads and Infrastructure 468,753,379 441,344,575 216,476,719 210,301,608 685,230,098 651,646,183 Total cost 658,797,683 635,844,837 370,349,999 363,679,392 1,029,147,682 999,524,229

Accumulated depreciation Buildings 52,451,586 52,675,177 38,629,055 36,878,587 91,080,641 89,553,764 Non-building improvements 10,967,455 10,713,373 8,608,656 8,436,276 19,576,111 19,149,649 Machinery and equipment 33,842,342 33,644,985 25,771,251 23,955,240 59,613,593 57,600,225 Roads and infrastructure 327,964,417 315,697,141 79,317,195 74,484,727 407,281,612 390,181,868 Total accumulated depreciation 425,225,800 412,730,676 152,326,157 143,754,830 577,551,957 556,485,506

Net depreciated assets 233,571,883 223,114,161 218,023,842 219,924,562 451,595,725 443,038,723

Net capital assets $ 266,077,813 $ 267,778,946 $ 238,478,889 $ 243,793,487 $ 504,556,702 $ 511,572,433

The investment in capital assets includes land and land improvements, buildings and building improvements, vehicles, information technology equipment, machinery and equipment, and construction in progress. A detailed explanation of these capital assets can be found in the Notes to the Financial Statements. Under the category of roads and infrastructure, the current cost amount of $685,230,098 includes estimated costs derived primarily from the City’s 2006 implementation of GASB Statement No. 34, which required the retroactive reporting of infrastructure capital assets. All other assets are recorded at historical cost. Major Capital Asset Project Spending in 2018 Included in capital asset additions for 2018 were the following major projects: • Infrastructure - $21,563,272 – Smart Streets • Infrastructure - $5,387,030 – Western Ave & Olive St. intersection, Edison and Ironwood corridor rehabilitation • Wastewater & Sewers - $6,533,100 – East Bank sewer separation – Phase 5 • Fire Department - $1,092,741 – 2 fire trucks and several additional vehicles • Parks Department - $781,992– Century Center cooling tower, several large vehicle purchases (boom truck, 2 dump trucks, and several smaller vehicles) • Street Department - $435,000 – asphalt milling machine (Wirtgen W150CFI)

21 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

Capital Assets Analysis As of December 31, 2018, government-wide capital assets were valued at $504,556,702, net of accumulated depreciation, a decrease of $7,015,731, or 1.37%, since December 31, 2017. Construction in progress decreased by $15,361,786, and capitalized assets in land, buildings, improvements, machinery and equipment, and roads increased by $8,346,055, net of depreciation, since December 31, 2017. On January 1, 2013, the City instituted a new capitalization policy that included significantly higher thresholds for expenditures to qualify as capital assets. Consequently, many purchases formerly considered as capital assets no longer qualify as such. The asset decrease is the result of fewer assets being added to the register as those assets that remain continue to depreciate. At December 31, 2018, the cost of roads & infrastructure ($685,230,098) was the major asset class followed by buildings ($203,809,760) and machinery & equipment ($92,182,305). Total depreciation expense was $31,715,747 for 2018, as compared to $31,452,259 for 2017. Depreciation expense was $19,656,335 for governmental activities and $12,059,412 for business-type activities for 2018. Additional information on capital assets can be found in the notes to the financial statements in Note 6. Debt Administration Outstanding debt principal as of December 31, 2018, was $259,820,000, an increase of $7,063,006, or 2.8% from 2017. City outstanding debt includes general obligation bonds, revenue bonds, mortgage bonds, notes and loans payable and capital leases.

Beginning Additions Retirements Ending

Governmental activities General obligation bonds $ 14,081,478 $ 5,082,316 $ (426,149) $ 18,737,645 Revenue bonds 111,887,531 15,877,292 (7,280,910) 120,483,913 Mortgage bonds 10,224,972 - (1,924,118) 8,300,854 Notes and loans 4,437,115 - (328,293) 4,108,822 Capital leases 9,795,612 6,759,121 (3,722,538) 12,832,195 Total governmental activities debt 150,426,708 27,718,729 (13,682,008) 164,463,429

Business-type activities General obligation bonds - - - - Revenue bonds 87,219,814 - (7,041,710) 80,178,104 Mortgage bonds 5,255,483 - (303,504) 4,951,979 Notes and loans 2,398,821 - (167,038) 2,231,783 Capital leases 7,456,168 2,866,214 (2,327,677) 7,994,705 Total business-type activities debt 102,330,286 2,866,214 (9,839,929) 95,356,571

Total Debt $ 252,756,994 $ 30,584,943 $ (23,521,937) $ 259,820,000

22 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

During 2018, the City entered into capital lease agreements in the amount of $9,625,335 to purchase certain vehicles, copiers, and equipment. The lease terms are typically for five years with semi-annual debt service paid from the operating budgets of the user departments. Capital lease financing is used to acquire police vehicles, public works vehicles, computer replacements, copiers and other vehicles and equipment. The City solicits competitive financing proposals for lease financing from local and national companies and the interest rate achieved during 2018 was on average less than 2% for these leases. Under the Indiana Constitution and the Indiana Code, the City's general obligation bonded debt and certain other debt is subject to a legal limitation based upon 2% of total assessed value of real and personal property. The City issued a general obligation bond in 2018 related to the construction of Fire Station #9 on the east side of the City and an additional building at the Fire Training Center. This debt issuance of $5,045,000 is subject to this debt limitation. A calculation of the City’s legal debt limitation can be found in the statistical debt capacity section of this document. Additional information on debt can be found in the Notes to Financial Statements in Note 8 - Leases and Note 9 - Long-term Debt. Significant Subsequent Events On January 14, 2019, the Common Council of the City of South Bend approved a $2 per month fee to increase sewer bills, with the intention to speed implementation of the City’s stormwater system. On February 28, 2012, the City, the United States of America, and the State of Indiana, agreed to a consent decree to resolve claims against the City for alleged violations of the Clean Water Act. The decree includes several provisions, including a long term control plan that requires the City to complete a construction program by December 31, 2031 at a cost of approximately $509.5 million in 2007 dollars to comprehensively upgrade and expand the City's sewage collection, storage, conveyance, and treatment system. Under this agreement South Bend was required to undertake a review of the Plan after 5 years and this review was completed in 2017. The review resulted in a revised plan that calls for a reduced investment of $200 million in 2017 dollars. The plan will meet the same environmental goals and will still run to 2031. South Bend is currently working with State and Federal environmental regulators to have this new more cost efficient plan formally endorsed. Economic Factors and 2018 Budget Economic Factors Property tax revenue, historically and at present, is the principal source of revenue for funding of governmental activities within the City. The State of Indiana General Assembly enacted property tax reform legislation in March 2008. Known as the “Circuit Breaker”, House Enrolled Act 1001 (HEA 1001) limits property taxes paid to 1% of gross assessed value for residential homesteads, 2% for agricultural/rental properties, and 3% for all other real and personal property. Under current legislation, all Indiana localities assess properties based on market values. Each year properties are “trended”, which involves comparing property values to sales activity in the neighborhood and adjusting the current assessed values up or down according to the trended data.

23 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

The Circuit Breaker legislation was phased in commencing in fiscal 2009 and has led to significant reductions in property tax revenues available to fund city governmental operations since then. In 2018, the primary funds supported by property taxes (General Fund, Parks and Recreation Fund, and Cumulative Capital Development Fund) lost approximately $33.9 million in taxable property tax levy due to the circuit breaker caps (Indiana Legislative Services Agency, Circuit Breaker Report, December 2018). As a consequence of the state enacted legislation in 2008, the City enacted a 0.95% local option income tax increase to partially offset the property tax revenue loss. The local option tax increase became effective in October 2009, and has resulted in an increase in local income taxes available to the City to fund ongoing governmental operations of public safety, parks and recreation, highways and streets and general government. Management of the City of South Bend will continue to oversee the financial affairs from a position of fiscal conservatism. Special attention will be given to maintaining adequate fund reserves in the General Fund and the income tax funds as they are very important to the continued financial strength of the City. City Management believes that the national economic recovery will continue for at least the next year, with low inflation over the next fiscal period. However, the City anticipates that the economy will slow sometime in the next 2-5 years, and is actively taking steps to alleviate negative impacts of an economic downturn (such as building cash reserves and implementing sustainable alternative revenue sources). Job creation is the primary engine to drive economic recovery, and the Congressional Budget Office (CBO) predicts a growth in Gross Domestic Product (GDP) of 2.1% for 2019. Notably, this is down from a GDP growth rate of 3.1% in 2018. The unemployment rate in the South Bend-Mishawaka Metropolitan Area continues to improve and was 3.7% in November 2018, down from a high of 13.0% in January 2010 (Bureau of Labor Statistics). 2019 Budget and Beyond The City will engage to ensure effective delivery of required services to taxpayers and residents within the constraints of available financial resources. The City will continue to provide required services within the constraints of a balanced General Fund budget. In the spirit of fiscal responsibility, the City has engaged in a process of program budgeting for the 2018 and 2019 budgets. This program budgeting is in addition to the state-required fund and account budgeting through the Indiana Department of Local Government Finance. The City’s fiscal responsibility is also preparing it for significant financial challenges in fiscal year 2020. Preliminary projections of circuit breaker property tax losses indicate a potential decline of property tax revenue of $1.6 million in the General Fund, $400,000 in the Parks & Recreation Fund and $3.8 million in the tax increment financing funds in fiscal year 2020. This is due to the expiration of a special credit to local governments in Saint Joseph County and Lake County, which decreased the losses that the City experienced through the Circuit Breaker tax credit. City Management is aware of this fiscal situation and is developing strategies to address this matter, including maintaining strong reserves, redesigning capital budgeting strategies, and ensuring that new spending is supported by new, sustainable revenue. Through its Office of Innovation, the City continues to pursue reengineering programs targeted to create efficiency and cost improvements within City operations. These include purchasing process reengineering, back-office process improvements for human resources,

24 City of South Bend, Indiana Management’s Discussion and Analysis (Continued)

performance management and other customer service operations. These initiatives, upon successful deployment completion, will achieve the desired results to create efficiency gains in the delivery of services to taxpayers. The City is committed to creating a budget for fiscal 2020 that will remain fiscally responsible to the effective delivery of required services to city residents and stakeholders within the existing revenue constraints. Specific concerns for the 2020 budget include the continuing impact of circuit breaker property tax reform on City revenue, high health and pension costs and other stagnant or declining revenue sources such as gasoline, wheel and auto excise taxes. Requests for Information This Management’s Discussion and Analysis, as contained within the City of South Bend Comprehensive Annual Financial Report, is intended to provide readers with a general overview of the financial condition of the City of South Bend as of December 31, 2018. Questions concerning any of the information provided in this report, or requests for additional information, should be addressed to: Daniel T. Parker, Controller

City of South Bend Department of Administration and Finance 227 W. Jefferson Blvd., 12th Floor South Bend, IN 46601

Telephone (574) 235-9822 Email [email protected]

City of South Bend June 30, 2019

25 City of South Bend, Indiana Statement of Net Position December 31, 2018

Governmental Business-type Activities Activities Total Assets Cash and cash equivalents $ 96,796,549 $ 10,818,469 $ 107,615,018 Investments 145,631,847 18,540,232 164,172,079 Receivables: Taxes 133,911 - 133,911 Accounts 552,933 5,462,751 6,015,684 Interest 599,908 157,940 757,848 Allowance for doubtful accounts - (160,100) (160,100) Intergovernmental 778,441 - 778,441 Loans 6,878,545 - 6,878,545 Internal balances (21,255) 21,255 - Inventory 892,939 1,152,358 2,045,297 Prepaid expenses 855,683 38,944 894,627 Restricted assets 457,020 35,027,906 35,484,926 Property held for resale 10,023,045 - 10,023,045 Net pension asset 3,021,911 - 3,021,911 Capital assets: Assets not subject to depreciation 32,505,930 20,455,046 52,960,976 Assets subject to depreciation - net 233,571,883 218,023,841 451,595,724

Total assets 532,679,290 309,538,642 842,217,932

Deferred outflows of resources Unamortized loss on refunding 1,976,132 1,749,817 3,725,949 Deferred outflows related to pensions 12,578,380 - 12,578,380 Deferred outflows related to OPEB 1,367,265 - 1,367,265

Total deferred outflows of resources 15,921,777 1,749,817 17,671,594

Liabilities Accounts payable 6,652,043 1,671,596 8,323,639 Due to other governmental units - 8,588 8,588 Performance deposits payable 101,175 8,250 109,425 Accrued liabilities and other: Accrued payroll payable 1,466,353 452,792 1,919,145 Accrued interest payable 23,312 551,161 574,473 Taxes payable 652 - 652 Customer deposits payable - 1,605,639 1,605,639 Unearned revenue - 402 402 Other current payables 81,002 194,709 275,711 Noncurrent liabilities: Due within one year: Accrued interest payable from restricted a 2,159,774 - 2,159,774 Compensated absences 6,316,138 705,374 7,021,512 Claims payable 3,058,641 - 3,058,641 Notes and loans payable 347,671 215,694 563,365 General obligation bonds payable 940,000 - 940,000 Mortgage bonds payable 1,864,355 310,645 2,175,000 Capital leases 3,813,983 2,415,533 6,229,516 Revenue bonds payable 7,338,538 8,635,000 15,973,538

See notes to financial statements. 26 City of South Bend, Indiana Statement of Net Position (Continued) December 31, 2018

Governmental Business-type Activities Activities Total Liabilities (continued) Due in more than one year: Notes and loans payable $ 3,761,151 $ 2,016,089 $ 5,777,240 General obligation bonds payable 17,797,645 - 17,797,645 Mortgage bonds payable 6,436,499 4,641,334 11,077,833 Capital leases 9,018,211 5,579,172 14,597,383 Net pension liability 163,536,593 - 163,536,593 Total OPEB liability 23,206,087 - 23,206,087 Revenue bonds payable 113,145,375 71,543,104 184,688,479

Total liabilities 371,065,198 100,555,082 471,620,280

Deferred inflows of resources Unamortized service agreement - 47,917 47,917 Deferred inflows related to pensions 11,431,450 - 11,431,450 Deferred inflows related to OPEB 7,996,270 - 7,996,270

Total deferred inflows of resources 19,427,720 47,917 19,475,637

Net position Net investment in capital assets 143,282,487 145,963,344 289,245,831 Restricted: Debt service fund 6,952,713 2,689,746 9,642,459 Customer repair and deposit fund - 3,518,128 3,518,128 Cash with fiscal agent - 237,505 237,505 Bond reserve fund 4,299,815 5,594,265 9,894,080 Operating reserve fund - 8,049,617 8,049,617 Capital outlay fund - 13,847,434 13,847,434 Unrestricted 3,573,134 30,785,421 34,358,555

Total net position $ 158,108,149 $ 210,685,460 $ 368,793,609

See notes to financial statements. 27 City of South Bend, Indiana

Statement of Activities Year Ended December 31, 2018

Net (Expense) Revenue and Changes in Program Revenue Net Position Operating Capital Grants Primary Government Charges for Grants and and Governmental Business-type Expenses Services Contributions Contributions Activities Activities Total Functions/programs Primary government: Governmental activities: General government$ 12,654,430 $ 718,155 $ 82,894 $ - $ (11,853,381) $ - $ (11,853,381) Public safety 69,209,163 702,977 10,800,837 - (57,705,349) - (57,705,349) Highways and streets 17,223,378 - 10,064,913 4,100,000 (3,058,465) - (3,058,465) Community and economic development 33,801,755 698,252 3,840,926 - (29,262,577) - (29,262,577) Culture and recreation 26,076,331 4,356,659 1,459,168 - (20,260,504) - (20,260,504) Interest on long-term debt 5,718,172 -- - (5,718,172) - (5,718,172)

Total governmental activities 164,683,229 6,476,043 26,248,738 4,100,000 (127,858,448) - (127,858,448)

Business-type activities: Water utility 14,788,847 17,183,460 - - - 2,394,613 2,394,613 Wastewater utility 25,744,139 39,931,429 - - - 14,187,290 14,187,290 Century center 5,287,797 3,258,017 278,112 - - (1,751,668) (1,751,668) Consolidated building 4,136,837 2,044,582 - - - (2,092,255) (2,092,255) Parking garage 1,565,351 1,323,524 - - - (241,827) (241,827) Solid waste 5,467,986 5,471,364 - - - 3,378 3,378 Emergency medical services 8,987,340 6,727,643 -- - (2,259,697) (2,259,697)

Total business-type activities 65,978,297 75,940,019 278,112 -- 1 0,239,834 10,239,834

Total primary government $ 230,661,526 $ 82,416,062 $ 26,526,850 $ 4,100,000 (127,858,448) 10,239,834 (117,618,614)

General revenue: Taxes: Property taxes 80,155,902 - 80,155,902 Income taxes 32,911,525 - 32,911,525 Hotel/motel taxes 616,437 1,275,000 1,891,437 Unrestricted state-shared revenue: - - - State-shared revenue 4,819,125 - 4,819,125 Unrestricted investment income 3,304,646 1,088,896 4,393,542 Gain on sale of capital assets - - - Other miscellaneous income 10,523,004 - 10,523,004

Total general revenue 132,330,639 2,363,896 134,694,535

Transfers 5,229,661 (5,229,661) -

Change in Net Position 9,701,852 7,374,069 17,075,921 Net Position - Beginning of year (restated) 148,406,297 203,311,391 351,717,688

Net Position - End of year $ 158,108,149 $ 210,685,460 $ 368,793,609

28 See notes to financial statements. City of South Bend, Indiana Governmental Funds Balance Sheet December 31, 2018

Parks and Public Safety General Fund Recreation LOIT COIT EDIT Assets Cash and cash equivalents$ 13,043,827 $ 2,807,237 $ 653,125 $ 3,934,490 $ 5,046,473 Investments 25,811,080 5,471,022 1,300,817 7,836,252 10,050,968 Receivables: Taxes - - - - - Accounts 316,634 30,546 - - - Interest 102,128 21,501 5,319 32,854 42,025 Intergovernmental 117,234 - - - - Loans - - - - - Due from other funds 21,833 - - - - Advances to other funds 425,680 - - 480,253 - Inventory - 22,322 - - - Property held for resale - - - 175,000 270,001 Restricted assets - -- - -

Total assets$ 39,838,416 $ 8,352,628 $ 1,959,261 $ 12,458,849 $ 15,409,467

Liabilities Accounts payable$ 115,530 $ 816,108 -$ $ 823,457 $ 136,947 Due to other funds 12,908 7,132 - - - Advances from other funds - - - - - Performance deposits payable 70,650 - - - 6,000 Accrued liabilities and other: Accrued payroll payable 990,701 130,362 122,184 - - Taxes payable 652 - - - - Other current payables 18,175 3,565 - - -

Total liabilities 1,208,616 957,167 122,184 823,457 142,947

Fund Balances Nonspendable 425,680 22,322 - - - Restricted - 7,373,139 1,837,077 - - Committed - - - - - Assigned 820,914 - - 11,635,392 15,266,520 Unassigned 37,383,206 -- --

Total fund balances 38,629,800 7,395,461 1,837,077 11,635,392 15,266,520

Total liabilities and fund balances$ 39,838,416 $ 8,352,628 $ 1,959,261 $ 12,458,849 $ 15,409,467

29 City of South Bend, Indiana Governmental Funds Balance Sheet (Continued) December 31, 2018

Nonmajor Rainy Day River West TIF Funds Total Assets Cash and cash equivalents$ 3,489,519 $ 11,835,531 $ 49,066,330 $ 89,876,532 Investments 6,950,012 19,830,107 54,669,267 131,919,525 Receivables: - Taxes - - 133,911 133,911 Accounts - - 101,659 448,839 Interest 29,195 80,494 228,610 542,126 Intergovernmental - - 661,207 778,441 Loans - 695,000 6,183,545 6,878,545 Due from other funds - 1,761 21,833 45,427 Advances to other funds - - 2,981,424 3,887,357 Inventory - - - 22,322 Property held for resale - 6,763,721 2,814,323 10,023,045 Restricted assets - - - -

Total assets$ 10,468,726 $ 39,206,614 $ 116,862,109 $ 244,556,070

Liabilities Accounts payable$ - $ 905,937 $ 2,879,810 $ 5,677,789 Due to other funds - 43,666 1,761 65,467 Advances from other funds - 200,000 3,687,357 3,887,357 Performance deposits payable - 18,525 6,000 101,175 Accrued liabilities and other: - Accrued payroll payable - - 120,651 1,363,898 Taxes payable - - - 652 Other current payables - 30,000 29,262 81,002

Total liabilities - 1,198,128 6,724,841 11,177,340

Fund Balances Nonspendable - - - 448,002 Restricted - 38,008,486 105,590,419 152,809,121 Committed - - 3,209,500 3,209,500 Assigned 10,468,726 - 1,337,349 39,528,901 Unassigned - - 37,383,206

Total fund balances 10,468,726 38,008,486 110,137,268 233,378,730

Total liabilities and fund balances$ 10,468,726 $ 39,206,614 $ 116,862,109 $ 244,556,070

30 City of South Bend, Indiana Governmental Funds Reconciliation of the Balance Sheet to the Statement of Net Position December 31, 2018

Fund Balance Reported in Governmental Funds $ 233,378,730 Amounts reported for governmental activities in the statement of net position are different: because: Capital assets used in governmental activities are not financial resources and are not reported in the funds 264,791,886 Prepaid expenses are not available to pay for current period expenditures, and therefore are deferred in the funds 15,853 Deferred outflows of resources related to pensions are not available to pay for current period expenditures, and therefore are reported in the funds 12,578,380 Net pension assets are not available to pay for current period expenditures, and therefore are not reported in the funds 3,021,911 Deferred outflows on refunding are not due and payable in the current period and are not reported in the funds 1,976,132 Deferred inflows related to OPEB are not due and payable in the current period and are not reported in the funds 1,367,265 Notes and loans payable, mortgage bonds payable, revenue bonds payable, and capital leases are not due and payable in the current period and are not reported in the funds (163,150,959) Accrued interest is not due and payable in the current period and is not reported in the funds (2,179,390) Employee compensated absences are payable over a long period of years and do not represent a claim on current financial resources; therefore, they are not reported as fund liabilities (6,082,068) Net pension liabilities do not present a claim on current financial resources and are not reported as fund liabilities (163,536,593) Deferred inflows of resources related to pensions do not present a claim on current financial resources and are not reported as fund liabilities (11,431,450) Total OPEB liability does not present a claim on current financial resources and is not reported as fund liability (23,206,087) Deferred inflows of resources related to OPEB do not present a claim on current financial resources and are not reported as fund liabilities (7,996,270) Internal service funds are included as part of governmental activities 18,560,809

Net Position of Governmental Activities $ 158,108,149

31 City of South Bend, Indiana Governmental Funds Statement of Revenue, Expenditures, and Changes in Fund Balances

Year Ended December 31, 2018

Parks and Public Safety General Recreation LOIT COIT EDIT Revenue Property taxes $ 40,719,333 $ 9,591,899 $ - $ - $ - Income taxes - - 8,487,336 12,339,734 12,084,455 Hotel/motel taxes - - - - - Licenses and permits 245,956 - - - - Intergovernmental 15,252,213 1,393,356 - - - Charges for services 1,648,729 1,716,415 - - - Fines and forfeitures 19,931 - - - 354,660 Investment income 487,383 85,518 23,056 187,535 266,451 Other revenue 7,664,710 378,579 - 171,375 2,109

Total revenue 66,038,255 13,165,767 8,510,392 12,698,644 12,707,675

Expenditures Current: General government 5,848,345 - - 4,757,144 1,757,592 Public safety 60,754,751 - 7,553,570 3,566,142 2,395,284 Highways and streets 1,498,784 - - 133,216 - Community and economic development - - - - - Culture and recreation 1,366,691 14,253,607 - - - Bond issuance costs - - - - - Capital outlay - - - - - Debt service: Principal 172,668 352,676 - 1,519,775 130,635 Interest on long-term debt 11,824 33,900 - 126,667 68,331

Total expenditures 69,653,063 14,640,183 7,553,570 10,102,944 4,351,842

Excess of Revenue (Under) Over Expenditures (3,614,808) (1,474,416) 956,822 2,595,700 8,355,833

Other Financing Sources (Uses) Debt proceeds - 351,760 - 2,240,968 - Premium on debt - - - - -

Proceeds from sale of capital assets 39,261 20,194 - - 596,073 Transfers in 6,760,910 2,345,845 - 324,159 - Transfers out (21,823) -- (2,824,261) (6,572,551)

Total other financing sources (uses) 6,778,348 2,717,799 - (259,134) (5,976,478)

Net Change in Fund Balances 3,163,540 1,243,383 956,822 2,336,566 2,379,355

Fund Balances - Beginning of year 35,466,260 6,152,078 880,255 9,298,826 12,887,165

Fund Balances - End of year $ 38,629,800 $ 7,395,461 $ 1,837,077 $ 11,635,392 $ 15,266,520

32 City of South Bend, Indiana Governmental Funds Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Year Ended December 31, 2018

Nonmajor Rainy Day River West TIF Funds Total Revenue Property taxes $ - $ 17,896,032 $ 11,948,638 $ 80,155,902 Income taxes - - - 32,911,525 Hotel/motel taxes - 395,000 221,437 616,437 Licenses and permits - - - 245,956 Intergovernmental - 4,100,000 14,422,294 35,167,863 Charges for services - 3,220 2,366,887 5,735,251 Fines and forfeitures 120,245 494,836 Investment income 187,321 498,401 1,568,981 3,304,646 Other revenue - 329,906 1,976,325 10,523,004

Total revenue 187,321 23,222,559 32,624,807 169,155,420

Expenditures Current: General government - - 400,145 12,763,226 Public safety - - 1,260,304 75,530,051 Highways and streets - - 15,274,126 16,906,126 Community and economic development - 14,374,491 7,804,782 22,179,273 Culture and recreation - - 977,466 16,597,764 Bond issuance costs - - 165,885 165,885 Capital outlay - - 23,240,519 23,240,519 Debt service: Principal - 2,706,409 8,252,562 13,134,725 Interest on long-term debt - 1,025,682 4,416,025 5,682,429

Total expenditures - 18,106,582 61,791,814 186,199,998

Excess of Revenue (Under) Over Expenditures 187,321 5,115,977 (29,167,007) (17,044,578)

Other Financing Sources (Uses) Debt proceeds - - 23,508,368 26,101,096 Premium on refunding debt - - 479,608 479,608

Proceeds from sale of capital assets - - 287,088 942,616 Transfers in - 47,597 18,718,777 28,197,288 Transfers out - (4,267,975) (8,841,878) (22,528,488)

Total other financing sources (uses) - (4,220,378) 34,151,963 33,192,120

Net Change in Fund Balances 187,321 895,599 4,984,956 16,147,542

Fund Balances - Beginning of year 10,281,405 37,112,887 105,152,312 217,231,188

Fund Balances - End of year $ 10,468,726 $ 38,008,486 $ 110,137,268 $ 233,378,730

33 City of South Bend, Indiana Governmental Funds Reconciliation of the Statement of Revenue, Expenditures, and Changes in Fund Balances of Governmental Funds Year Ended December 31, 2018

Net Change in Fund Balances - Total governmental funds $ 16,147,542 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures; however, in the statement of activities, these costs are allocated over their estimated useful lives as depreciation: Capital outlay 20,320,068 Depreciation expense (19,524,511) Net book value of assets disposed of and transferred (2,370,047) Prepaid expenses recorded in the statement of net position do not require the use of current financial resources, and therefore are not reported in the fund statements (101,894) Debt proceeds (from notes and loans payable, mortgage bonds payable, revenue bonds payable, and capital leases) provide financial resources to governmental funds, but issuing debt increases long- term liabilities in the statement of net position (26,101,096) Premium on debt proceeds provide financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position (479,608) Repayment of debt principal is an expenditure in the governmental funds, but not in the statement of activities (where it reduces long-term debt) 13,134,725 Other adjustments related to debt premiums, discounts, deferred inflows, and deferred outflows 198,979 Changes in accrued interest payable and other (235,174) Changes in compensated absences reported in the statement of activities do not require the use of current resources, and therefore are not reported in the fund statements until they come due for payment (850,730) Changes in the total OPEB liability reported in the statement of activities do not require the use of current resources, and therefore are not reported in the fund statements until they come due for payment (1,094,798) Changes in the net pension asset, net pension liabilities, and related deferred inflows and outflows reported in the statement of activities do not require the use of current resources, and therefore are not reported in the fund statements until they come due for payment 9,685,762 Internal service funds are included as part of governmental activities - Net change in position 972,634

Change in Net Position of Governmental Activities $ 9,701,852

34 City of South Bend, Indiana Proprietary Funds Statement of Net Position December 31, 2018

Governmental Enterprise Funds Activities Wastewater Nonmajor Proprietary Water Utility Utility Century Center Enterprise Total Internal Service Assets Current assets: Cash and cash equivalents$ 1,543,682 $ 5,068,929 $ 1,517,429 $ 2,688,429 $ 10,818,469 $ 6,920,017 Investments 3,074,522 10,095,693 15,523 5,354,494 18,540,232 13,712,322 Receivables: - Accounts 897,909 2,428,638 261,108 1,875,096 5,462,751 104,094 Interest 38,177 90,720 50 28,993 157,940 57,782 Allowance for doubtful accounts (50,000) (85,100) - (25,000) (160,100) - Due from other funds 29,996 10,380 - - 40,376 - Inventory 907,252 210,324 34,782 - 1,152,358 870,617 Prepaid expenses 6,366 8,696 15,023 8,859 38,944 839,830

Total current assets 6,447,904 17,828,280 1,843,915 9,930,871 36,050,970 22,504,662

Noncurrent assets: Restricted assets 8,999,654 22,309,706 857,363 2,861,183 35,027,906 457,020 Capital assets: Assets not subject to depreciation 807,908 17,774,284 713,434 1,159,420 20,455,046 - Assets subject to depreciation 53,506,827 135,304,004 16,320,861 12,892,149 218,023,841 1,285,927

Total noncurrent assets 63,314,389 175,387,994 17,891,658 16,912,752 273,506,793 1,742,947

Total assets 69,762,293 193,216,274 19,735,573 26,843,623 309,557,763 24,247,609

Deferred Outflows of Resources - Unamortized loss on refunding 78,870 1,670,947 -- 1,749,817 -

Liabilities Current liabilities: Accounts payable 413,677 851,222 65,517 341,180 1,671,596 974,254 Due to other governmental units - - - 8,588 8,588 - Due to other funds 10,380 1,585 4,204 2,952 19,121 1,215 Performance deposits payable - - - 8,250 8,250 - Accrued liabilities and other: Accrued payroll payable 104,734 134,684 17,073 196,301 452,792 102,455 Accrued interest payable 292,158 165,768 - 93,235 551,161 3,696 Customer deposits payable 1,318,152 204,693 82,794 - 1,605,639 - Unearned revenue 402 - - - 402 - Other current payables 53,095 - 97,467 44,147 194,709 - Compensated absences 179,331 155,886 35,245 334,912 705,374 234,070 Notes and loans payable 43,962 171,732 - - 215,694 - Mortgage bonds payable - 75,645 - 235,000 310,645 - Claims payable - - - - - 3,058,641 Capital leases 396,773 564,025 - 1,454,735 2,415,533 336,106 Revenue bonds payable 2,875,000 5,760,000 -- 8,635,000 -

Total current liabilities 5,687,664 8,085,240 302,300 2,719,300 16,794,504 4,710,437

Noncurrent liabilities: Notes and loans payable 267,688 1,748,401 - - 2,016,089 - Mortgage bonds payable - 119,466 - 4,521,868 4,641,334 - Capital leases 899,736 1,006,633 - 3,672,803 5,579,172 976,363 Revenue bonds payable 12,776,340 58,766,764 -- 71,543,104 -

Total noncurrent liabilities 13,943,764 61,641,264 -8,194,671 83,779,699 976,363

Total liabilities 19,631,428 69,726,504 302,300 10,913,971 100,574,203 5,686,800

35 City of South Bend, Indiana Proprietary Funds Statement of Net Position (Continued) December 31, 2018

Governmental Enterprise Funds Activities Wastewater Nonmajor Proprietary Water Utility Utility Century Center Enterprise Total Internal Service Deferred Inflows of Resources Unamortized service agreement$ - $ -$ 47,917 $ -$ 47,917 $ -

Total deferred inflows of resources - -47,917 -47,917 -

Net Position Net investment in capital assets 37,134,241 86,894,283 17,034,295 4,900,525 145,963,344 1,252,541 Restricted: - Debt service fund 1,726,068 963,678 - - 2,689,746 - Customer repair and deposit fund 1,503,325 2,014,803 - - 3,518,128 - Cash with fiscal agent 32,903 77,844 - 126,758 237,505 - Bond reserve fund 1,390,019 4,204,246 - - 5,594,265 - Operating reserve fund 2,663,671 5,385,946 - - 8,049,617 - Capital outlay fund 1,888,226 9,100,782 857,363 2,001,063 13,847,434 - Unrestricted 3,871,282 16,519,135 1,493,698 8,901,306 30,785,421 17,308,268

Total net position $ 5 0,209,735 $ 1 25,160,717 $ 19,385,356 $ 15,929,652 $ 210,685,460 $ 18,560,809

36 City of South Bend, Indiana Proprietary Funds Statement of Revenue, Expenses, and Changes in Net Position December 31, 2018

Governmental Enterprise Funds Activities Wastewater Nonmajor Proprietary Water Utility Utility Century Center Enterprise Total Internal Service Operating Revenue Metered revenue$ 11,234,087 $ 38,905,147 $ - $ - $ 50,139,234 $ - Convention fees - - 3,152,698 - 3,152,698 - Fire protection revenue 2,302,252 - - - 2,302,252 - Licenses and permits - - - 1,978,856 1,978,856 - Interest and penalty charges 75,174 551,447 - - 626,621 - Parking fees - - 100,724 1,289,639 1,390,363 - Solid waste fees - - - 5,408,816 5,408,816 - Employee/Employer contributions - - - - - 27,074,744 Charges for sales and services - - - 6,702,767 6,702,767 8,201,435 Water leak insurance revenue 1,023,089 - - - 1,023,089 - Charges to other funds 1,390,950 53,107 - - 1,444,057 - Other 741,731 421,728 4,595 187,035 1,355,089 1,311,668

Total operating revenue 16,767,283 39,931,429 3,258,017 15,567,113 75,523,842 36,587,847

Operating Expenses Cost of water 6,452,869 - - - 6,452,869 - Cost of sewage treatment - 12,525,253 - - 12,525,253 - Other operation and maintenance - - - 15,586,057 15,586,057 15,281,285 General and administration 2,368,950 3,692,863 4,242,566 1,511,933 11,816,312 850,522 Insurance claims and premiums - - - - - 19,237,014 Plumbing contractors 810,322 - - - 810,322 - Customer service 2,133,943 - - - 2,133,943 - Depreciation 2,012,849 7,337,086 1,045,231 1,664,246 12,059,412 131,823

Total operating expenses 13,778,933 23,555,202 5,287,797 18,762,236 61,384,168 35,500,644

Operating Income (Loss) 2,988,350 16,376,227 (2,029,780) (3,195,123) 14,139,674 1,087,203

Nonoperating Revenue (Expenses) Investment income 188,877 681,805 2,020 216,194 1,088,896 356,652 Hotel/Motel tax revenue - - 1,275,000 - 1,275,000 - Interest expense (618,348) (2,183,941) - (262,826) (3,065,115) (32,077) (Loss) gain on sale of assets (391,566) (4,996) - (1,132,452) (1,529,014) (5) Other nonoperating revenue (expenses) 29,448 -- - 29,448 -

Total nonoperating revenues (expenses) (791,589) (1,507,132) 1,277,020 (1,179,084) (2,200,785) 324,570

Income (Loss) - Before contributions and transfers 2,196,761 14,869,095 (752,760) (4,374,207) 11,938,889 1,411,773

Capital Contributions - Other capital contributions 386,729 - 278,112 - 664,841 - Transfers In - 368,196 - 1,069,457 1,437,653 - Transfers Out (1,730,831) (4,601,656) (85,909) (248,918) (6,667,314) (439,139)

Change in Net Position 852,659 10,635,635 (560,557) (3,553,668) 7,374,069 972,634

Net Position - Beginning of year (as restated) 49,357,076 114,525,082 19,945,913 19,483,320 203,311,391 17,588,175

Net Position - End of year$ 50,209,735 $ 125,160,717 $ 19,385,356 $ 15,929,652 $ 210,685,460 $ 18,560,809

37 City of South Bend, Indiana Proprietary Funds Statement of Cash Flows Year Ended December 31, 2018

Governmental Activities Enterprise Funds Proprietary Wastewater Century Nonmajor Internal Service Water Utility Utility Center Enterprise Total Fund

Cash flows from operating activities Receipts from customers and users $ 1 5,151,036 $ 4 0,541,502 $ 3,168,170 $ 16,847,367 $ 75,708,075 $ 4,529,967 Receipts from interfund services and reimbursements 1,391,119 45,777 - - 1,436,896 32,057,100 Payments to suppliers (5,565,342) (7,506,811) (3,614,351) (5,765,897) (22,452,401) (28,559,648) Payments to employees (5,076,681) (7,555,402) (451,286) (9,299,254) (22,382,623) (5,562,693) Internal activity - payments to other funds (1,388,990) (3,513,511) (122,905) (1,930,521) (6,955,927) (552,458) Internal activity - payments from other funds ------Net cash provided by (used in) operating activities 4, 511,142 2 2,011,555 (1,020,372) (148,305) 25,354,020 1,912,268

Cash flows from noncapital financing activities Transfers from other funds - 368,196 - 1,042,478 1,410,674 - Hotel/motel tax - - 1,275,000 - 1,275,000 - Transfers to other funds (1,730,831) (4,601,656) (85,909) (221,939) (6,640,335) (439,139) Other nonoperating revenue 29,448 -- - 29,448 - Net cash (used in) provided by noncapital financing activities (1,701,383) (4,233,460) 1,189,091 820,539 (3,925,213) (439,139)

Cash flows from capital and related financing activities Proceeds from capital debt Contributions 386,729 - - - 386,729 - Proceeds from capital debt issued for future capital purchase - - - 2,866,215 2,866,215 1,138,025 Proceeds from sales of capital assets 4,094 22,310 - 26,312 52,716 3,266 Purchase of capital assets (834,656) (4,497,146) - (2,716,628) (8,048,430) (8,905) Principal paid on capital debt (394,873) (7,821,444) - (1,556,584) (9,772,901) (223,558) Interest paid on capital debt (319,700) (2,033,062) - (275,200) (2,627,962) (29,451) Debt service charge ------Net cash (used in) provided by capital and related financing activities (1,158,406) (14,329,342) - (1,655,885) (17,143,633) 879,377

Cash flows from investing activities Interest received on investments 172,327 645,890 1,970 208,317 1,028,504 330,920 Proceeds from sale and maturities of investment securities (1,260,662) (1,276,846) (15,523) 1,165,985 (1,387,046) (1,794,046) Net cash provided by (used in) investing activities (1,088,335) (630,956) (13,553) 1,374,302 (358,542) (1,463,126)

Net increase in cash and cash equivalents 563,018 2, 817,797 155,166 390,651 3,926,632 889,380

Cash and cash equivalents - beginning of year 3,874,612 12,933,552 2,219,626 3,826,774 22,854,564 6,487,657

Cash and cash equivalents - end of year $ 4 ,437,630 $ 1 5,751,349 $ 2,374,792 $ 4,217,425 $ 26,781,196 $ 7,377,037

See notes to financial statements. 38 City of South Bend, Indiana Proprietary Funds Statement of Cash Flows (Continued) Year Ended December 31, 2018

Governmental Activities Enterprise Funds Proprietary Wastewater Century Nonmajor Internal Service Water Utility Utility Center Enterprise Total Fund

Classification of cash and cash equivalents Cash and investments $ 4,618,204 $ 15,164,622 $ 1,532,952 $ 8,042,923 $ 29,358,701 $ 20,632,339 Restricted cash and investments 8 ,999,654 22, 309,706 857,363 2,861,183 35,027,906 457,020 Less amounts classified as investments (9,180,228) (21,722,979) (15,523) (6,686,681) (37,605,411) (13,712,322) Total cash and cash equivalents $ 4 ,437,630 $ 1 5,751,349 $ 2,374,792 $ 4,217,425 $ 26,781,196 $ 7,377,037

Reconciliation of operating income (loss) to net cash from operating activities Operating income (loss) $ 2,988,350 $ 16,376,227 $ (2,029,780) $ (3,195,123) $ 14,139,674 $ 1,087,203 Adjustments to reconcile operating income (loss) to net cash from operating activities: Depreciation and amortization 2,012,849 7,337,086 1,045,231 1,664,246 12,059,412 131,823 Changes in assets and liabilities: Receivables (25,491) 463,257 (56,076) 1,267,298 1,648,988 (3,957) Due from other funds 169 (7,330) - - (7,161) 3,178 Inventory (411,931) (54,386) 2,134 - (464,183) 21,549 Prepaid expenses and other assets 22,838 25,360 6,271 21,025 75,494 (328,444) Accounts payable 121,909 (2,216,763) (60,289) (54,057) (2,209,200) 78,630 Due to other governments - - - (66,705) (66,705) - Performance deposit - - - (3,750) (3,750) - Due to other funds 7,119 914 1,444 (548) 8,929 (1,223) Accrued liabilities and other 9,068 - 52,146 12,956 74,170 - Accrued payroll payable 16,701 (13,539) 17,073 36,222 56,457 13,054 Compensated absences payable (30,633) (99,194) 35,245 170,131 75,549 (38,425) Customer deposits (198,137) 204,693 (33,771) - (27,215) - Unearned revenue (1,669) (4,770) - - (6,439) - Estimate of unfiled claims - - -- -948,880 Net cash provided by (used in) operating activities $ 4 ,511,142 $ 2 2,011,555 $ (1,020,372) $ (148,305) $ 25,354,020 $ 1,912,268

Significant noncash transactions Capital assets disposed (at cost) $ (1,005,066) $ (2,053,227) $ (329,181) $ (1,668,872) $ (5,056,346) $ (219,365) Capital asset contribution - - 278,112 - 278,112 - Work in progress completed transferred to capital assets - 5,011,137 - - 5,011,137 - Accumulated depreciation on disposals - of capital assets 609,406 2,025,921 329,181 510,108 3,474,616 216,093

See notes to financial statements. 39 City of South Bend, Indiana Fiduciary Funds Statement of Fiduciary Net Position December 31, 2018

Pension Private- Trust Purpose Trust Agency Funds Fund Funds Assets Cash and cash equivalents $ 421,376 $ 161,717 $ 3,389,966 Investments U.S. Treasuries 839,248 322,088 - Receivables - Accounts 893 - - Receivables - Interest 4,013 1,353 - Total assets 1,265,530 485,158 $ 3,389,966

Liabilities Accounts payable 421 - -$ Accrued liabilities and other 372 - 324,526 Customer deposits payable - - 2,226,914 Police distribution payable - - 838,526

Total liabilities 793 -$ 3,389,966

Net Position for Pension Benefits and Other Purposes $ 1,264,737 $ 485,158

40 City of South Bend, Indiana Fiduciary Funds Statement of Changes in Fiduciary Net Position Year Ended December 31, 2018

Private- Pension Trust Purpose Trust Funds Fund Additions Investment income - Interest and dividends$ 22,815 $ 682 Contributions: On behalf 10,699,527 - Other 11,665 31,207

Total contributions 10,711,192 31,207

Total additions 10,734,007 31,889

Deductions Benefit payments 10,792,236 - Administrative expenses 28,608 -

Total deductions 10,820,844 -

Net (Decrease) Increase in Net Position (86,837) 31,889

Net Position - Beginning of year 1,351,574 453,269

Net Position - End of year $ 1,264,737 $ 485,158

41 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies Reporting Entity The City of South Bend (the "City") was established under the laws of the State of Indiana and operates under a Council-Mayor form of government. The accompanying financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Although blended component units are legal separate entities, in substance, they are part of the City's operations. Blended Component Units The South Bend Redevelopment Authority is a significant blended component unit of the City. Although it is legally separate from the City, the Redevelopment Authority is reported as if it were part of the City because its sole purpose is to finance and construct land, building, and other improvements for use by the City. Financial statements for the Redevelopment Authority are available at the City Controller's Office, City of South Bend, 227 West Jefferson, 12th Floor County-City Building, South Bend, Indiana 46601. The South Bend Building Corporation, Inc. is also a legally separate nonprofit corporation and a significant blended component unit of the City. The Building Corporation is reported as if it were part of the City because its main purpose is to finance construction and remodeling of City buildings. Debt of the Building Corporation is repaid through lease payments from the City. Financial statements for the Building Corporation are available at the City Controller's Office, City of South Bend, 227 West Jefferson, 12th Floor County-City Building, South Bend, Indiana 46601. Related Organizations The City's officials are also responsible for appointing the members of the boards of other organizations, but the City's accountability for these organizations does not extend beyond making the appointments. The mayor and the Common Council appoint the board members of the South Bend Housing Authority, South Bend Public Transportation Corporation (TRANSPO), Urban Enterprise Association, St. Joseph County Housing Consortium, and the Saint Joseph County Board of Managers for Hotel-Motel Tax. Accounting and Reporting Principles The City follows accounting principles generally accepted in the United States of America (GAAP) as applicable to governmental units. Accounting and financial reporting pronouncements are promulgated by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies used by the City:

42 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) Report Presentation Governmental accounting principles require that financial reports include two different perspectives - the government-wide perspective and the fund-based perspective. The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. The government-wide financial statements are presented on the economic resources measurement focus and the full accrual basis of accounting. Property taxes are recognized as revenue in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The statements also present a schedule reconciling these amounts to the modified accrual based presentation found in the fund-based statements. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenue. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenue includes: (1) charges to customers or applicants for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions, including special assessments. Taxes and other items not properly included among program revenue are reported instead as general revenue. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City's water and sewer function and various other functions of the City. Eliminations of these charges would distort the direct costs and program revenue reported for the various functions concerned. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Fund Accounting The City accounts for its various activities in several different funds in order to demonstrate accountability for how we have spent certain resources; separate funds allow us to show the particular expenditures for which specific revenue was used. The various funds are aggregated into three broad fund types: Governmental Funds Governmental funds include all activities that provide general governmental services that are not business-type activities. This includes the General Fund, special revenue funds, debt service funds, and capital project funds. The City reports the following funds as “major” governmental funds: • The General Fund is the primary operating fund because it accounts for all financial resources used to provide government services other than those specifically assigned to another fund.

43 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) • The Parks and Recreation Fund is used to account for the operation of the City park system. Financing is provided by a specific annual property tax levy to the extent that user fees and miscellaneous revenues are insufficient to provide such financing. • The Public Safety Local Option Income Tax (LOIT) Fund is used to account for the City's share of the public safety local option income tax. Expenditures are restricted to public safety. • The County Option Income Tax (COIT) Fund is used to account for the City's share of the county option income tax. Expenditures include any lawful purpose of the City. • The Economic Development Income Tax (EDIT) Fund is to account for the City's share of the County Economic Development Tax. Expenditures include any lawful purpose of the City. • The Rainy Day fund is for unused and unencumbered funds that are transferred from a fund that has a tax levy. Revenues in this fund also include special distributions of county option income tax (COIT) and county economic development income tax (CEDIT). • The River West TIF (Tax Incremental Financing) Fund is used to account for public improvement projects in the river west economic development area. Financing is provided by property tax proceeds in excess of those attributable to the assessed value of property in the district before redevelopment. Proprietary Funds Proprietary funds include enterprise funds (which provide goods or services to users in exchange for charges or fees) and internal service funds (which provide goods or services to other funds of the City). The City reports the following funds as “major” enterprise funds: • The Water Utility Fund accounts for the operation of the City's water distribution system. • The Wastewater Utility Fund accounts for the operation of the City's wastewater treatment plant, pumping stations, and collection systems. • The Century Center Fund accounts for the operation and maintenance of the City's convention center. Financing is received from various user fees for conventions, meetings, and other events held at the civic center and a subsidy from the St. Joseph County's Special Funds Board of Managers. The City’s internal service funds are used to account for various City liability coverage, employee medical coverage, police officers' take home vehicle, innovation & technology/311 call center, unemployment claims, parental leave program, and central services such as fuel, vehicle repairs, and various supplies provided to other departments on a cost-reimbursement basis. The activities are accounted for on a full accrual basis, so that the full costs are recognized and allocated to the various funds in the year that the costs are incurred.

44 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) Fiduciary Funds Fiduciary funds include amounts held in a fiduciary capacity for others. These amounts will not be used to operate our government's programs. Activities that are reported as fiduciary include the following: • The pension trust funds account for the activities of the 1925 Police and 1937 Fire Pension Funds which accumulate resources for pension benefit payments. • The Private-Purpose Trust Funds report a trust arrangement under which principal and income benefit cemetery maintenance. • The agency funds account for assets held by the City as an agent for employee payroll, pension, and payroll deductions, held for an entertainment center’s event deposits, and collected by the South Bend Police Department from asset seizures. Interfund Activity During the course of operations, the City has activity between funds for various purposes. Any residual balances outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between the funds included in governmental activities (i.e., the governmental and internal service funds) are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between the funds included in business-type activities (i.e., the enterprise funds) are eliminated so that only the net amount is included as internal balances in the business-type activities column. Furthermore, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements, these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the governmentwide financial statements. Transfers between the funds included in governmental activities are eliminated so that only the net amount is included as transfers in the governmental activities column. Similarly, balances between the funds included in business-type activities are eliminated so that only the net amount is included as transfers in the business-type activities column. Basis of Accounting The governmental funds use the current financial resources measurement focus and the modified accrual basis of accounting. This basis of accounting is intended to better demonstrate accountability for how the government has spent its resources. Expenditures are reported when the goods are received or the services are rendered. Capital outlays are reported as expenditures (rather than as capital assets) because they reduce the ability to spend resources in the future; conversely, employee benefit costs that will be funded in the future (such as pension and retiree healthcare related costs, or sick and vacation pay) are not counted until they come due for payment. In addition, debt service expenditures, claims, and judgments are recorded only when payment is due.

45 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) Revenue is not recognized until it is collected, or collected soon enough after the end of the year that they are available to pay for obligations outstanding at the end of the year. For this purpose, the City considers amounts collected within 60 days of year end to be available for recognition. The following major revenue sources meet the availability criterion: property taxes, franchise taxes, licenses, and interest associated with the current fiscal period. Proprietary funds and fiduciary funds use the economic resources measurement focus and the full accrual basis of accounting. Revenue is recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of related cash flows.

Specific Balances and Transactions Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits, and short-term investments with a maturity of three months or less when acquired. Investments State statute (IC 5-13-9) authorizes the City to invest in securities, including but not limited to, federal government securities, repurchase agreements, and certain money market mutual funds. Certain other statutory restrictions apply to all investments made by local governmental units. Nonparticipating certificates of deposit, demand deposits, and similar nonparticipating negotiable instruments that are not reported as cash and cash equivalents are reported as investments at cost. A “nonparticipating” instrument is one that does not recognize market fluctuations in its valuation. Debt securities are reported at fair value. Debt securities are defined as securities backed by the full faith and credit of the United States Treasury or fully insured or guaranteed by the United States or any United States government agency. Open-end mutual funds are reported at fair value. Money market investments are reported fair value. Investment income, including changes in the fair value of investments, is reported as revenue in the operating statement. Inventories and Prepaid Items Inventories are valued at cost, on a first-in, first-out basis. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future fiscal years and are recorded as prepaid items in both government-wide and fund financial statements.

46 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) Restricted Assets Certain proceeds of the enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net position because their use is limited by applicable bond covenants. Restricted assets also include customer deposits, operating reserves, capital outlay accounts, and debt service reserve funds. Capital Assets Capital assets, which include property, plant, equipment, intangible assets, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business type activities column in the government-wide financial statements. Capital assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated acquisition value at the date of donation. The City has implemented retroactive reporting of its infrastructure as of December 31, 2006. For depreciated assets, the cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. All land purchases are capitalized regardless of acquisition price. Land is never depreciated. Major outlays for capital assets and improvements are capitalized when projects have completed the construction phase. The City has implemented GASB 89 for the year ended December 31, 2018 and no interest was capitalized during the construction of capital assets of business-type activities. Infrastructure, intangibles, buildings, equipment, roads, and vehicles are depreciated using the straight line method over the following useful lives: Capitalization Capital Asset Class Threshold Lives (in years)

Buildings and improvements $ 100,000 20 - 30 Large office equipment 10,000 5 - 10 Vehicles and other equipment 10,000 5 - 20 Roads - Collectors and residential 250,000 40 - 50 Utilities infrastructure (large) 250,000 30 - 99

47 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) Long-term Obligations In the government-wide financial statements and the proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund-type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed at the time they are incurred. In the fund financial statements, governmental fund types recognize bond issuances as an “other financing source,” as well as bond premiums and discounts. Net position restricted for debt service and for capital outlay shown in the business-type activities and in the enterprise funds are restricted pursuant to state statute and/or local ordinance. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until then. The City has three items that qualify for reporting in this category. The deferred charge on refunding, deferred charges on pensions, and deferred charges on other postemployment benefits (OPEB) that are reported in the governmental activities statement of net position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. Deferred outflows of resources are recorded with respect to pensions per GASB Statement No. 68 and OPEB per GASB Statement No. 75. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. The City has three items that qualify for reporting in this category: an unamortized amount related to a service agreement, deferred inflows related to pensions per GASB Statement No. 68 and deferred inflows related to OPEB per GASB Statement No. 75. Net Position Flow Assumption The City will sometimes fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government- wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.

48 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) Fund Balance Flow Assumptions The City will sometimes fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Furthermore, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first followed by assigned fund balance. Unassigned fund balance is applied last. Fund Balance Policies Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The government itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance). Nonspendable fund balances include items that cannot be spent. This includes activity that is not in a spendable form (primarily inventory, although in the General Fund this may include long-term portions of loans, advances to other funds, and property held for resale) and activity that is legally or contractually required to remain intact, such as principal balances in a permanent fund. Restricted fund balances have constraints placed upon the use of the resources either by an external party such as a grantor or creditor or imposed by law through constitutional provisions or enabling legislation. Committed fund balances can be used only for specific purposes pursuant to constraints imposed by a formal action by the South Bend Common Council, for all non-TIF Funds, or by the South Bend Redevelopment Commission for TIF Funds. This formal action is the passage of an ordinance by the Council or resolution by the Commission specifying the purposes for which the funds can be used. The same type of formal action is necessary to remove or change the specified use. The South Bend Common Council is the highest level of decision-making authority for the non-TIF Funds. The South Bend Redevelopment Commission is the highest level of decision-making authority for the TIF Funds. Assigned fund balances include amounts that are constrained by the City's intent to be used for a specific purpose, but are neither restricted nor committed. For the governmental fund types other than the General Fund, this is the residual amount within the fund that is not restricted or committed. Currently, state statute does not require the City’s Common Council to undertake any resolution regarding the assignment of fund balances. Assignments of fund balance are imposed by informal action of the City Controller. Formal action by a governing body is not required to assign fund balances.

49 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) The unassigned fund balance is the residual amount of the General Fund not included in the four categories above. Only the General Fund may report a positive unassigned fund balance whereas other governmental funds may need to report a negative unassigned fund balance if expenditures incurred for specific purposes exceeded the amounts restricted, committed, or assigned to those purposes. The fund balance policy proscribes the minimum fund balance as noted below. This is deemed to be the prudent amount to maintain the City's ability to meet obligations as they come due throughout the year. • General: 35 percent of annual expenditures • COIT: 50 percent of annual expenditures • EDIT: 50 percent of annual expenditures • Water operating: 5 percent of annual expenditures • Wastewater operating: 5 percent of annual expenditures • Other: generally 25 percent of annual expenditures The detail of the fund balance classifications of the governmental funds for the year ended December 31, 2018 can be found in Note 16. Property Tax Revenue Property taxes levied are collected by the County Treasurer and are usually distributed to the City in June and in December. State statute (IC 6-1.1-17-16) requires the Indiana Department of Local Government Finance to establish property tax rates and levies by February 15. These rates are based on the taxable valuation of property as of the preceding January 1. Taxable property is assessed at 100 percent of the true tax value (determined in accordance with rules and regulations adopted by the Indiana Department of Local Government Finance). Taxes may be paid in two equal installments that become delinquent if not paid by May 10 and November 10, respectively, at which time penalties and interest are assessed. Pension The City offers a defined benefit pension plan to its employees. The City records a net pension liability for the difference between the total pension liability calculated by the actuary and the pension plan’s fiduciary net position. For the purpose of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plans and additions to/deductions from the pension plans' fiduciary net position have been determined on the same basis as they are reported by the pension plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

50 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) Other Postemployment Benefit Costs The City offers retiree healthcare benefits to retirees. For purposes of measuring the total OPEB liability in the government-wide financial statements, deferred outflows of resources and deferred inflows of resources related to OPEB, OPEB expense, and information about the fiduciary net position of the The City of South Bend Retiree Healthcare Plan (SBRHP) have been determined on the same basis as they are reported by SBRHP.

Compensated Absences (Vacation and Sick Leave) • Sick Leave - City employees earn sick leave at the rate of four to eight days per year, depending upon employee classification and length of service. Police officers, teamsters, 40-hour-per-week firefighters, and all other employees earn eight sick days per year, regardless of tenure of service. Firefighters working 24-hour workdays with tenure greater than five years earn five days of sick leave per year, and firefighters working 24-hour workdays with tenure less than five years, earn four days of sick leave per year. Sick leave may accumulate to a maximum 90 days for police officers, 100 days for 40-hour-per-week firefighters, 38 days for 24-per-day firefighter, 75 days for teamsters, and 65 days for all other employees. Accumulated sick leave is paid to firefighters and police officers upon termination of employment depending upon the number of sick leave hours transacted, at a rate of 50 percent to 100 percent of the base hourly rate of pay for firefighters and at a rate of one-half the first class patrolman rank rate of pay for police officers. Accumulated sick leave is paid to teamster employees, upon retirement, at a rate of $40 for each accumulated sick leave day transacted. Sick leave buy-back during employment is paid to firefighters and police officers annually upon request. Upon request, firefighters are paid unused sick days earned in the previous year in excess of 252 hours in the sick day bank at the base hourly rate of pay. Upon request, police officers are paid up to a maximum eight unused sick days at the first class patrolman rate of pay. • Vacation Leave - Primary government employees earn vacation leave at rates from zero days to 28 days based upon hire date, years of service, and employee classification. Vacation leave does not accumulate from year to year for police officers, firefighters, and teamster employees, except in instances where special cases are approved. Nonbargaining employees carry over to the following year unused vacation time up to a maximum of 160 hours. Employees earn vacation leave during the year for use in the succeeding year. Unused vacation leave is paid to employees upon termination of employment. Firefighters may sell back vacation leave, up to a maximum three days per year, during selected times of the year, at the employee’s normal hourly rate of pay

51 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) • Personal Leave - City police officers earn personal leave at the rate of seven days per year, and have the opportunity to earn an additional three days leave with participation in regularly scheduled police practice shooting exercises. Police officers personal leave does not accumulate from year to year. Police officers unused personal leave may be rolled into sick leave. City employees under the teamster contract can use up to four days of their sick leave for personal leave. Personal leave of absence may be available for certain personal, family, and medical reasons when other forms of leave have been exhausted or otherwise not available. Leaves of absences are unpaid although employees may use accrued vacation, sick, and comp time. A leave of absence may not exceed 30 calendar days, however an employee facing exceptional circumstances may seek an additional 30 calendar day leave of absence subject to approval by the department and HR department. Employees who are enrolled in the City's insurance plans will be covered during the initial leave of absence, but benefit time, such as vacation and sick time, will not accrue during this period. While every effort will be made to retain employment opportunities for an individual during this time, there is no guarantee of employment at the completion of personal leave of absence. • Compensatory Leave - City firefighters can elect to receive compensation for overtime hours worked either through wage payment or compensatory time off work up to a maximum of 240 hours. All other nonexempt employees working overtime hours earn compensatory time off up to a maximum balance of 32 hours, after which they are paid overtime wage. All other exempt employees working overtime hours earn compensatory time up to a maximum balance of 160 hours. Unused vacation leave for all City employees, and unused sick leave and compensatory leave of firefighters, police officers, and teamsters, is accrued when incurred and reported as a liability in the statement of net position. Amounts due and payable at year end are included in the proprietary fund statements. A liability for these amounts is reported in governmental funds only for employee terminations as of year-end. Proprietary Funds Operating Classification Proprietary funds distinguish operating revenue and expenses from nonoperating items. Operating revenue and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenue of the Water and Wastewater Utility Funds, Century Center fund, and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenue and expenses.

52 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 1 - Significant Accounting Policies (Continued) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Upcoming Accounting Pronouncements The following pronouncements issued by the GASB will be effective for the City’s financial statements for the year ending December 31, 2019. The City is currently evaluating the impact these standards will have on the financial statements when adopted. • GASB Statement No. 83: Certain Asset Retirement Obligations

o This statement establishes criteria for determining the timing and amount of recognition of a liability for certain asset retirement obligations • GASB Statement No. 84: Fiduciary Activities

o This statement improves the guidance on the identification of fiduciary activities for accounting and Financial Reporting purpose, focusing on whether a government controls the assets of the activity and the beneficiaries with whom a fiduciary relationship exists. • GASB Statement No. 88: Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements

o Requires additional disclosure related to debt, including unused lines of credit, pledged assets, significant termination events, and significant subjective acceleration clauses. • GASB Statement No. 90: Majority Equity Interests – an amendment of GASB Statements No. 14 and No. 61

o Improves reporting consistency for a government’s majority equity interest in a legally separate organization and improves the reporting of certain component units.

53 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 2 - Stewardship, Compliance, and Accountability Budgetary Information Annual budgets are adopted on the cash basis which is not consistent with accounting principles generally accepted in the United States of America. All annual appropriations lapse at fiscal year end. Annual budgets are adopted for the following governmental funds: Major governmental funds: • General Fund • Special Revenue Funds - Park and Recreation, Public Safety Local Option Income Tax (LOIT), County Option Income Tax (COIT), Economic Development Income Tax (EDIT), Rainy Day • Capital Projects Fund - River West TIF Nonmajor governmental funds: • Special Revenue Funds - Motor Vehicle Highway, Recreation Nonreverting, Studebaker Oliver Revitalization Grants, Economic Development State Grants, DCI Operating, Community Investment Grants, Police State Seizure, Juvenile Positive Assistance, Unsafe Building, Law Enforcement Continuing Education, Landlord Registration, Loss Recovery, Local Road and Street, LOIT 2016 Special Distribution, Human Rights- Federal Grant, Local Road and Bridge Grant, Morris and Palais Marketing, Morris PAC Self Promotion, Police Block Grants, Economic Development Commission, Hazmat, Indiana River Rescue, COPS Block Grant II, Regional Police Academy, COPS MORE Grant, Federal Drug Enforcement, Gift, Urban Development Action Grant, Leaf Collection and Removal, Police K-9 Unit, Industrial Revolving • Debt Service Fund - College Football Hall of Fame Debt Service, Redevelopment Bond Airport Taxable, Coveleski Bond Debt Service Reserve, Redevelopment Bond Palais Royale, South Bend Building Corporation Debt Service, Smart Streets Debt Service, 2015 Parks Bond Debt Service, Century Center Energy Conservation Debt Service, Redevelopment Authority Debt Service, Eddy St. Commons Debt Service, 2017 Parks Bond Debt Service, 2018 TIF Park Bonds Debt Service Reserve • Capital Projects Funds - Professional Sports Development, Coveleski Stadium Capital, Park Nonreverting Capital, Cumulative Capital Development, Cumulative Capital Improvement, Morris Performing Arts Center Capital, Redevelopment Retail Area (Leighton Plaza), TIF West Washington, Redevelopment General, TIF No. 1 Southside Development, Football Hall of Fame Capital, Major Moves, TIF River East Development, TIF Douglas Road, TIF River East Residential, Certified Technology Park, Palais Royale Historic Preservation, Airport Urban Enterprise Zone, Vehicle Equipment Leasing, Smart Streets Bond Capital Projects, 2015 Parks Bond Capital Projects, 2017 Parks Bond Capital Projects, Eddy St. Commons Capital, 2018 Fire Station No. 9 Bond Capital, 2018 TIF Park Bond Capital

54 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 2 - Stewardship, Compliance, and Accountability (Continued) On or before August 31, the City Controller submits to the Common Council a proposed operating budget for the year commencing the following January 1. Prior to adoption, the budget is advertised and public hearings are conducted by the Common Council to obtain taxpayer comments. Prior to November 1 of each year, the Common Council, through the passage of an ordinance, approves the budget for the next year. Copies of the budget ordinance and the advertisement for funds for which property taxes are levied or highway use taxes are received are sent to the Indiana Department of Local Government Finance. The budget becomes legally enacted after the City Controller receives approval of the Indiana Department of Local Government Finance. The City's management cannot transfer budgeted appropriations between object classifications, namely, Personnel, Supplies, Services, or Capital of a fund budget without approval of the Common Council. The Department of Local Government Finance must approve any revisions to the appropriations for any fund or any department of the General Fund. The legal level of budgetary control is by object and department within the fund for the General Fund and by object within the fund for all other budgeted funds. Expenditures did not exceed appropriations for any funds or any departments within the General fund, the Parks and Recreation Fund, the Public Safety LOIT Fund, the COIT Fund, the EDIT Fund, the Rainy Day Fund, or any other major or nonmajor governmental fund which required legally approved budgets except for the Redevelopment Bond – Airport Taxable Fund and the South Bend Building Corporation Debt Service Fund. In 2018, these two funds incurred paying agent fees higher than anticipated. Fund Deficits At December 31, 2018, no funds reported a deficit in fund equity, which are violations of State statute. Note 3 - Deposits and Investments Authorization for investment activity is stated in Indiana Code 5-13. Indiana Code 5-13-9 has authorized investment in securities backed by the full faith and credit of the United States Treasury or fully guaranteed by the United States of America and issued by the United States Treasury, a federal agency, a federal instrumentality, or a federal government-sponsored enterprise. These investments are required by statute to have a stated final maturity of not more than five years. Indiana Code also provides for investment in money market mutual funds that are in the form of securities of, or interest in, an open-end, no-load, management-type investment company or investment trust registered under the provision of the federal Investment Company Act of 1940, as amended. Investments in money market mutual funds may not exceed 50 percent of the funds held by the City and available for investment. The portfolio of an investment company or investment trust used must be limited to direct obligations of the United States of America, obligations issued by the federal agency, a federal instrumentality, or a federal government- sponsored enterprise; or repurchase agreements fully collateralized by direct obligations of the United States of America or obligations issued by a federal agency, a federal instrumentality, or a federal government-sponsored enterprise. The form of securities of, or interest in, an investment company or investment trust must be rated as AAA, or its equivalent by Standard & Poor's Corporation or its successor or Aaa, or its equivalent, by Moody's Investors Service, Inc., or its successor. The form of securities in an investment company or investment trust should have a stated final maturity of one day.

55 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 3 - Deposits and Investments (Continued) Additionally, the City may enter into repurchase agreements with depositories designated by the State Board of Finance as depositories for state deposits involving the unit's purchase and guaranteed resale of any interest-bearing obligations issued or fully insured or guaranteed by the United States of America, a United States of America government agency, an instrumentality of the United States of America, or a federal government- sponsored enterprise. The repurchase agreement must be fully collateralized by interest- bearing obligations as determined by their current market value. The City's cash and investments are subject to several types of risk, which are examined in more detail below: Custodial Credit Risk of Bank Deposits Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. Indiana Code 5-13-8-1 allows a political subdivision of the State of Indiana to deposit public funds in a financial institution only if that institution is a depository eligible to receive state funds and has a principal office or branch that qualifies to receive public funds of the political subdivision. At year end, the bank balances held at the following institutions were collateralized with securities held by the pledging financial institution's trust department or agent in the depositor-City's name: US Bank NA $ 20,507,721 Bank of New York Mellon 4,237,149 1st Source Bank 2,207,321 Wells Fargo Bank, NA 629,341

The remaining bank balances were insured by the Federal Deposit Insurance Corporation or the Public Deposit Insurance Fund, which covers all public funds held in approved depositories. The City has not formally adopted a deposit policy for custodial credit risk. Custodial Credit Risk of Investments Custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City does not have a policy for custodial credit risk. At year end, $67,964,808 of investment securities was uninsured and unregistered, with securities held by the counterparty or by its trust department or agent but not in the City's name. Interest Rate Risk Interest rate risk is the risk that the value of investments will decrease as a result of a rise in interest rates. The City must follow state statute and limit the stated final maturities of the investments to no more than five years. The City does not have a formal investment policy for interest rate risk.

56 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 3 - Deposits and Investments (Continued) At year end, the City had the following investments and maturities:

Less than One One to Two More than Primary Government Fair Value Year Years Two Years U.S. Treasuries $ 22,026,416 $ 22,026,416 $ - $ - U.S. Government Agency 45,938,392 21,313,442 19,686,215 4,938,735 Securities Total $ 67,964,808 $ 43,339,858 $ 19,686,215 $ 4,938,735 Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. U.S. government agency securities are implicitly guaranteed by the full faith and credit of the U.S. government and are recognized as one of the safest investments available. The City does not have a formal investment policy for credit risk. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. It is the City's practice to limit concentration of investments to no more than 10 percent of any institution's asset base. United States of America government and United States of America governmental agency securities are exempt from this policy requirement. Fair Value Measurements The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not classified in the fair value hierarchy below. In instances whereby inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The City’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. The City has the following recurring fair value measurements as of December 31, 2018: • The fair value of U.S. Treasuries and U.S. Government Agency securities of $67,964,808 are valued primarily using quoted prices in active markets (Level 1 inputs). If an active market is unavailable for a particular security, a third party pricing firm is used to value the security by comparing to other securities with similar characteristics (Level 2 inputs).

57 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 4 - Receivables The following receivable accounts have timing and credit characteristics different from typical accounts receivable. As of December 31, 2018 City funds recognized the following loan receivable balances. The schedule shows the total receivable and the portion that is not due within one year. These loans were for economic development projects:

Receivable Noncurrent

TIF River West $ 695,000 $ 675,000

Nonmajor governmental funds: Economic developent state grants 189,400 105,236 Community investment grants 211,068 164,633 Urban development action grant 506,401 468,893 Industrial revolving 5,276,676 4,115,807

Total nonmajor governmental funds $ 6,183,545 $ 4,854,569

Note 5 - Net Investment in Capital Assets The net investment in capital assets is calculated as follows:

Governmental Business-type Activities Activities Total Capital assets not subject to depreciation $ 32,505,930 $ 20,455,046 $ 52,960,976 Capital assets subject to depreciation - Net 233,571,883 218,023,841 451,595,724 Deferred outflows (capital related) 1,976,132 1,749,817 3,725,949 Notes and loans payable - current (347,671) (215,694) (563,365) General obligations bonds payable-current (940,000) - (940,000) Mortgage bonds payable - current (1,864,355) (310,645) (2,175,000) Capital leases payable - current (3,813,983) (2,415,533) (6,229,516) Revenue bonds payable - current (7,338,538) (8,635,000) (15,973,538) Notes and loans payable - noncurrent (3,761,151) (2,016,089) (5,777,240) General obligations bonds payable-noncurrent (17,797,645) (17,797,645) Mortgage bonds payable - noncurrent (6,436,499) (4,641,334) (11,077,833) Capital leases payable - noncurrent (9,018,211) (5,579,172) (14,597,383) Revenue bonds payable - noncurrent (113,145,375) (71,543,104) (184,688,479) Unspent debt proceeds 39,691,970 1,091,211 40,783,181

Net investment in capital assets $ 143,282,487 $ 145,963,344 $ 289,245,831

The business-type activities' unspent debt proceeds are capital lease proceeds, reported as cash with fiscal agent.

58 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 6 - Capital Assets Capital asset activity of the City's governmental and business-type activities was as follows: Governmental Activities

Balance Balance Governmental Activities: January 1, 2018 Additions Disposals December 31, 2018

Capital assets, non-depreciable: Land $ 14,707,088 $ - $ (210,947) $ 14,496,141 Construction in progress 29,957,697 11,827,908 (23,775,816) 18,009,789

Total capital assets, non-depreciable 44,664,785 11,827,908 (23,986,763) 32,505,930

Capital assets, depreciable Buildings 125,886,853 258,045 (5,760,814) 120,384,084 Improvements other than buildings 21,519,259 - (467,190) 21,052,069 Machinery and equipment 47,094,151 4,610,032 (3,096,032) 48,608,151 Roads and other infrastructure 441,344,575 27,408,804 - 468,753,379

Subtotal 635,844,838 32,276,881 (9,324,036) 658,797,683

Less accumulated depreciation for: Buildings 52,675,177 3,433,524 (3,657,115) 52,451,586 Improvements other than buildings 10,713,373 721,271 (467,189) 10,967,455 Machinery and equipment 33,644,985 3,234,264 (3,036,907) 33,842,342 Roads and other infrastructure 315,697,141 12,267,276 - 327,964,417

Subtotal 412,730,676 19,656,335 (7,161,211) 425,225,800

Net capital assets, depreciable 223,114,162 12,620,546 (2,162,825) 233,571,883

Total governmental activities capital assets, net $ 267,778,947 $ 24,448,454 $ (26,149,588) $ 266,077,813

59 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 6 - Capital Assets (Continued) Business-type Activities

Balance Balance Business-type Activities January 1, 2018 Additions Disposals December 31, 2018

Capital assets, non-depreciable: Land $ 2,614,014 - - $ 2,614,014 Construction in progress 21,254,911 1,597,258 (5,011,136) 17,841,033

Total capital assets, non-depreciable 23,868,925 1,597,258 (5,011,136) 20,455,047

Capital assets, depreciable Buildings 83,233,461 497,843 (305,628) 83,425,676 Improvements other than buildings 27,939,323 - (1,065,873) 26,873,450 Machinery and equipment 42,205,000 2,997,902 (1,628,748) 43,574,154 Roads and other infrastructure 210,301,608 7,226,273 (1,051,162) 216,476,719

Subtotal 363,679,392 10,722,018 (4,051,411) 370,349,999

Less accumulated depreciation for: Buildings 36,878,587 2,055,449 (304,981) 38,629,055 Improvements other than buildings 8,436,276 1,238,253 (1,065,873) 8,608,656 Machinery and equipment 23,955,240 3,291,384 (1,475,373) 25,771,251 Roads and other infrastructure 74,484,727 5,493,597 (661,129) 79,317,195

Subtotal 143,754,830 12,078,683 (3,507,356) 152,326,157

Net capital assets, depreciable 219,924,562 (1,356,665) (544,055) 218,023,842

Total governmental activities capital assets, net $ 243,793,487 $ 240,593 $ (5,555,191) $ 238,478,889

Accumulated depreciation additions shown in the two schedules above include depreciation expense and also include accumulated depreciation on assets transferred from other funds.

60 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 6 - Capital Assets (Continued) Depreciation expense was charged to programs of the primary government as follows:

Governmental Activities: General Government $ 41,409 Public Safety 2,590,532 Highways and streets, and other general infrastructure 13,519,668 Culture and recreation 2,839,197 Economic development 533,705 Internal service funds 131,824

Total governmental activities depreciation expense $ 19,656,335

Business-type Activities: Emergency medical service $ 494,269 Water 2,012,849 Wastewater 7,337,086 Century Center 1,045,231 Building department & code enforcement 183,236 Parking garage 211,743 Solid waste 774,998

Total activities business-type expense $ 12,059,412

Prior year accumulated depreciation for transfer into business-type activities 19,271

Total additions to accumulated depreciation per capital asset depreciation schedules $ 12,078,683

61 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 6 - Capital Assets (Continued) Construction Commitments The City has active construction projects at year end. As of December 31, 2018, the City's commitments with contractors are as follows:

Remaining Project Spent to Date Commitment Governmental activities: Howard Park/Riverfront Trail Improvements $ 2,089,726 $ 15,656,842 Fire Station #4 3,077,134 273,928 Fire Station #9 1,674,818 1,676,244 Aerial Fire Truck 581,547 400,627 SBFD Training Center Classroom Building 63,807 586,131 Parks Maintenance Storage Building 42,658 345,232 Parks Experiential Vehicle 250,000 350,000 Charles Black Center Renovations 3,725,555 247,905 Erskine Golf Course 133,408 853,734 Lincolnway East Corridor Improvements 405,774 69,611 LWW and Charles Martin Sr. Drive Improvements 1,042,032 153,231 St. Joseph Streetscape Improvements 334,308 91,921 Miami Basin Improvements 53,959 439,041 One Way to Two Way Conversion: Chippewa Avenue Roundabout 4,535,063 305,658

Total - governmental activities 18,009,789 21,450,105

Business-type activities: Water Utility: North Station Well #1 Replacement $ 103,654 $ 33,824 Prairie Ave Water Main Loop 129,304 63,196 South Wellfield, Plant & Pressure Zone Improvements 198,000 52,000 Wastewater Utility: Secondary Clarifier Rehab/Secondary Treatment Impr. 16,031,207 3,999 WWTP Influent Gates Improvement 588,208 484,012 Airport Annexation Area Sanitary Sewer Extension 82,398 684,559 Farmington 14A Lift Station Rehabilitation 319,534 41,044 WWTP Electrical Improvements 376,974 5,955,366 WWTP Belt Filter Press No. 1 Rehabilitation - 203,131 WWTP Raw Sewage Pump No. 2 Rehabilitation 11,754 358,246

Total - business-type activities 17,841,033 7,879,377

Total $ 35,850,822 $ 29,329,482

62 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 7 - Interfund Receivables, Payables, and Transfers Interfund balances resulted from the time lag between the dates that (1) interfund loans are repaid, (2) interfund goods and services are provided or reimbursable expenditures occur, (3) transactions are recorded in the accounting system, and (4) payments between funds are made. The composition of interfund balances at December 31, 2018 is as follows:

Receivable Fund Payable Fund Amount Due to/from Other Funds

General River West TIF $ 21,833

River West TIF Nonmajor governmental 1,761

Nonmajor governmental River West TIF 21,833

Water Utility General 12,908 Parks & Rec 7,132 Wastewater Utility 1,585 Century Center 4,204 Nonmajor enterprise 2,952 Internal service 1,215 Total Water Utility 29,996

Wastewater Utility Water Utility 10,380

Total $ 85,803

The City has made the following long-term advances between funds:

Receivable Fund Payable Fund Amount Advances from/to Other Funds General Nonmajor governmental $ 425,680

COIT Nonmajor governmental 480,253

Nonmajor governmental River West TIF 200,000 Nonmajor governmental 2,781,424 Total nonmajor governmental 2,981,424

Total $ 3,887,357

63 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 7 - Interfund Receivables, Payables, and Transfers (Continued) Specific purposes of the advances are as follows: the General Fund advanced funds to the Football Hall of Fame to cover operating expenses. The COIT Fund advanced funds to the Urban Development Action Grant Fund for community development projects. Major Moves advanced funds to the Douglas Road and River East Residential TIFs for project costs incurred to construct roads and a parking garage. Interfund transfers reported in the fund financial statements are comprised of the following:

Receiving Fund Paying Fund Amount General Nonmajor governmental $ 14,709 Water Utility 1,730,831 Wastewater Utility 4,601,656 Internal Service 413,714 Total General 6,760,910

Parks and Recreation COIT 1,287,600 Nonmajor governmental 1,058,245 Total Parks and 2,345,845

COIT Nonmajor governmental 324,159

River West TIF Nonmajor governmental 47,597

Nonmajor governmental General 21,823 COIT 1,536,661 EDIT 5,582,998 River West TIF 4,267,975 Nonmajor governmental 7,001,472 Century Center 85,909 Nonmajor enterprise 221,939 Total nonmajor 18,718,777

Wastewater Utility Nonmajor governmental 368,196

Nonmajor enterprise EDIT 989,553 Nonmajor governmental 27,500 Nonmajor enterprise 26,979 Internal Service 25,425 Total nonmajor 1,069,457

Grand Total $ 29,634,941

64 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 7 - Interfund Receivables, Payables, and Transfers (Continued) The City typically uses transfers to fund ongoing operating subsidies. Specific purposes of the transfers are as follows: The Water and Wastewater Utility Funds transferred PILOT funds to the General Fund for general use. The COIT, EDIT, River West TIF, Cumulative Capital Improvement, and TIF River East Residential Funds transferred funds to the Redevelopment Authority and South Bend Building Corporation Debt Services Funds for debt service payments. The COIT and EDIT Funds transferred funds to the Motor Vehicle Highway Fund for general operations as well as for the curb and sidewalk improvements. The EDIT Fund transferred funds to the DCI Operating Fund for salaries and wages relating to community investment initiatives and to the Unsafe Building Fund and Consolidated Building Fund for general operations of the Unsafe Building, Code Enforcement and Animal Care & Control. The Local Roads and Streets and LOIT 2016 Special Distribution Funds transferred matching grant funds to the Local Road and Bridge Matching Grant Fund. The Leaf Collection and Removal Fund transferred funds collected from customers for leaf collection to the Motor Vehicle Highway Fund to cover supervisory personnel in charge of the Leaf Collection and Removal program. Note 8 - Leases Operating Leases The City has entered into various operating leases having initial or remaining noncancelable terms exceeding one year for golf cart global positioning systems, office machines, and office space. Rental expenditures for these leases were $160,866. The following is a schedule by years of future minimum rental payments as of December 31, 2018:

Years Ending December 31 Amount

2019 $ 135,161 2020 113,390 2021 82,750 2022 83,852 2023 68,462

Total $ 483,615

65 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 8 - Leases (Continued) Capital Leases The City has entered into various lease agreements as lessee for financing the purchase of various types of equipment and two parking garages. The parking garage capital leases are being repaid from governmental funds. Future minimum lease payments and present values of the net minimum lease payments under these capital leases as of December 31, 2018 are as follows:

Years Ending Governmental Business-type December 31 Activities Activities

2019 $ 4,126,270 $ 2,577,008 2020 3,742,865 2,519,368 2021 3,150,777 1,723,664 2022 1,523,771 1,241,249 2023 737,233 310,475 2024-2028 400,000 -

Total minimum lease payments 13,680,916 8,371,764

Less amount representing interest 848,721 377,059

Present value $ 12,832,195 $ 7,994,705

Assets acquired through capital leases still in effect are as follows:

Governmental Business-type Activities Activities

Buildings $ - $ 1,324,615 Machinery and equipment 10,266,039 6,585,672

Total 10,266,039 7,910,287

Accumulated depreciation (3,715,666) (3,122,825)

Net $ 6,550,373 $ 4,787,462

66 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 9 - Long-term Debt Long-term debt activity for the year ended December 31, 2018 can be summarized as follows: Governmental Activities

Due Beginning Ending Within Balance Additions Reductions Balance One Year

Governmental Activities Bonds payable: General obligation* $ 14,075,000 $ 5,045,000 $ (425,000) $ 18,695,000 $ 940,000 Less unamortized (discounts)/premiums 6,478 37,316 (1,149) 42,645 - Net - general obligation 14,081,478 5,082,316 (426,149) 18,737,645 940,000 Mortgage 9,556,860 - (1,801,815) 7,755,045 1,864,355 Less unamortized (discounts)/premiums 668,112 - (122,303) 545,809 - Net - mortgage 10,224,972 - (1,924,118) 8,300,854 1,864,355 Revenue 109,878,855 15,435,000 (7,080,635) 118,233,220 7,338,538 Less unamortized (discounts)/premiums 2,008,676 442,292 (200,275) 2,250,693 - Net - revenue 111,887,531 15,877,292 (7,280,910) 120,483,913 7,338,538

Total bonds payable 136,193,981 20,959,608 (9,631,177) 147,522,412 10,142,893

Notes and loans payable 4,437,115 - (328,293) 4,108,822 347,671 Capital leases 9,795,612 6,759,121 (3,722,538) 12,832,195 3,813,983

Subtotal 150,426,708 27,718,729 (13,682,008) 164,463,429 14,304,547

Accumulated Compensated Absences 5,503,833 6,316,138 (5,503,833) 6,316,138 6,316,138 Net pension liability 178,885,176 - (15,348,583) 163,536,593 - Total other postemployment benefits (OPEB) liability** 28,740,294 - (5,534,207) 23,206,087 -

Total governmental activities $ 363,556,011 $ 34,034,867 $ (30,779,059) $ 366,811,819 $ 20,620,685

* - General Obligation bonds have been reclassified and were previously reported as revenue bonds payable at 12-31-17 ** - Total OPEB obligation beginning balance has been restated - see note 21

67 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 9 - Long-term Debt (Continued) Business-type Activities

Due Beginning Ending Within Balance Additions Reductions Balance One Year

Busine ss-type a ctivitie s:

Bonds payable: Mortgage $ 5,188,140 $ - $ (298,185) $ 4,889,955 $ 310,645 Less unamortized (discounts)/premiums 67,343 - (5,319) 62,024 - Net - mortgage 5,255,483 - (303,504) 4,951,979 310,645 Revenue 87,065,000 - (6,980,000) 80,085,000 8,635,000 Less unamortized (discounts)/premiums 154,814 - (61,710) 93,104 - Net - revenue 87,219,814 - (7,041,710) 80,178,104 8,635,000

Total bonds payable 92,475,297 - (7,345,214) 85,130,083 8,945,645

Capital leases payable 7,456,168 2,866,214 (2,327,677) 7,994,705 2,415,533 Notes and loans payable: 2,398,821 - (167,038) 2,231,783 215,694

Total business-type activities long-term liabilities $ 102,330,286 $ 2,866,214 $ (9,839,929) $ 95,356,571 $ 11,576,872

Total interest expense for the year was $8,228,307. Revenue Bonds The City issues bonds to provide for the acquisition and construction of major capital facilities. Revenue bonds involve a pledge of specific income derived from the acquired or constructed assets and to pay debt service. The City has pledged future revenue, net of operating expenses, to repay water and wastewater utilities' bonds. Bond ordinances require monthly deposits of a portion of user fee revenue sufficient to meet requirements of the next principal, interest, and bank fiscal charge payment. Water and wastewater bond ordinances also require monthly deposits of user fee revenues over 60 months to produce a bond reserve equal to approximately the maximum annual debt service. During 2018, the Water Utility paid $714,573 in debt payments or approximately 4.3 percent of operating revenue. The Wastewater Utility paid $9,854,506 in debt payments or approximately 24.7 percent of operating revenue. The City has pledged tax incremental financing revenue to meet tax incremental financing and Redevelopment Authority debt requirements. The City has pledged economic development income taxes (EDIT) to meet the EDIT revenue bond debt requirements with payments of debt service of $ 578,072 during 2018. The City has also pledged taxes in the Professional Sports and Convention Development (PSCD) Area to meet the PSCD revenue bonds with payments of debt service of $814,070 during 2018.

68 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 9 - Long-term Debt (Continued) Bonds outstanding at December 31, 2018 are as follows:

Governmental Activities

General Obligation Bonds South Bend Park District Bonds, Series 2017(A-K) - Interest rates 3% - 3.25% - Original issue $14,075,000 - Installments of $350,000 to $580,000 plus interest - Maturity January 15, 2033 $ 13,725,000

General Obligation Bonds, Series 2018 (Fire Station #9) - Interest rates 3% - 3.25% - Original issue $5,045,000 - Installments of $75,000 to $170,000 plus interest - Maturity January 15, 2038 4,970,000

Subtotal 18,695,000

Mortgage Bonds Building Corporation County Option Income Tax Lease Rental Revenue Refunding Bonds of 2010 (Public Works Service Center) - Interest rates 2% - 5% - Original issue $6,075,000, 87.7% Governmental ($5,327,775) - Installments of $240,000 to $330,000 plus interest 1,390,045 - Maturity February 1, 2021

Building Corporation First Mortgage Revenue Refunding Bonds, Series 2012 (Police & Fire Station Projects) - Interest rates 2.1% - 5% - Original issue $13,595,000 - Installments of $545,000 to $770,000 plus interest - Maturity February 1, 2023 6,365,000

Subtotal 7,755,045

69 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 9 - Long-term Debt (Continued)

Revenue Bonds Indiana Bond Bank Special Program Bonds, Series 2011A (TIF A) - Interest rates 4% - 5.2% - Original issue $18,030,000 - Installments of $260,000 to $935,000 plus interest 9,810,000

Indiana Bond Bank Special Program Bonds, Series 2011A (TIF B) - Interest rates 4% - 5.2% - Original issue $10,435,000 - Installments of $254,036 to $530,000 plus interest - Maturity August 1, 2024 5,585,000

South Bend Redevelopment District Special Taxing District Refunding Bonds of 2014 - Interest rates 2% - 3% - Original issue $3,440,000 - Installments of $395,000 to $470,000 plus interest - Maturity January 1, 2022 1,795,000

South Bend Redevelopment Authority Lease Rental Revenue Bonds of 2015 (Refunding 2008) - Interest rates 2% - 5% - Original issue $31,450,000 - Installments of $650,000 to $1,210,000 plus interest - Maturity February 15, 2033 27,400,000

South Bend Redevelopment Authority Lease Rental Revenue Refunding Bonds, - Interest rates 2% - 4% - Original issue $3,990,000 - Installments of $160,000 to $375,000 plus interest * - Maturity May 1, 2026 2,565,000

Redevelopment District Taxable Revenue Bonds, Series 2010 (Recovery Zone Economic Development Bonds) - Interest rates 1.75% - 5.2% - Original issue $4,980,000 - Installments of $285,000 to $345,000 plus interest - Maturity January 5, 2019 345,000

70 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 9 - Long-term Debt (Continued)

2014 St. Joseph County PSAP (EDIT) Revenue Bonds - City's portion of $9.155M bond (29.03%) - Interest rates 2% - 3.625% - Original issue $2,657,697 - Installments of $9,314 to $12,700 plus interest - Maturity December 31, 2034 2,148,220

South Bend Redevelopment Authority Lease Rental Revenue Bonds of 2015 (Smart Streets Project) - Interest rates 3% - 4% - Original issue $25,000,000 - Installments of $460,000 to $840,000 plus interest - Maturity February 1, 2037 23,600,000

Economic Development Income Tax Bonds of 2015 (Parks Projects) - Interest rates 3% - 3.75% - Original issue $5,605,000 - Installments of $16,667 to $65,000 plus interest - Maturity August 1, 2035 4,980,000

Taxable Economic Development Revenue Bonds, Series 2017 (Eddy Street Phase II) - Interest rate 5% - Original issue $25,000,000 - Installments of $628,472 to $1,834,750 plus interest - Maturity February 15, 2037 24,975,000

Redevelopment District Bonds, Series 2018 (Parks Projects) - Interest rates 2% - 3% - Original issue $11,995,000 - Installments of $405,000 to $490,000 plus interest - Maturity February 1, 2033 11,590,000

Economic Development Revenue Bonds, Series 2018 (Potawatomi Zoo Project) - Interest rates 4% - 5% - Original issue $3,440,000 - Installments of $25,000 to $155,000 plus interest - Maturity February 1, 2034 3,440,000 Total Governmental Revenue Bonds 118,233,220

Total Governmental Activities $ 144,683,265 * - St. Joseph County has irrevocably pledged hotel-motel tax revenues to finance debt payments

71 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 9 - Long-term Debt (Continued)

Busine ss-Type Activitie s:

Mortgage Bonds Building Corporation County Option Income Tax Lease Rental Revenue Refunding Bonds - Interest rates 2% - 5% - Original issue $6,075,000, 12.3% Business-Type ($747,225) - Installments of $240,000 to $330,000 plus interest - Maturity February 1, 2021 $ 194,955

Building Corporation First Mortgage Revenue Bonds, Series 2013 - Interest rates 3% to 4.2% - Original issue $5,580,000 - Installments of $215,000 to $425,000 plus interest - Maturity February 1, 2033 4,695,000

Total Business-Type Mortgage Bonds 4,889,955

Revenue Bonds Water Works Refunding Revenue Bonds of 2012B - Interest rate 2% - Original issue $3,785,000 - Installments of $335,000 to $425,000 plus interest - Maturity January 1, 2023 2,005,000

Water Works Revenue Bonds of 2009, Series B - Interest rates 3.8% - 5.89% - Original issue $5,380,000 - Installments of $195,000 to $455,000 plus interest - Maturity January 1, 2030 4, 085,000

Sewage Works Revenue Bonds of 2010 - Interest rates 2% - 4.5% - Original issue $9,345,000 - Installments of $365,000 to $665,000 plus interest - Maturity December 1, 2030 6,345,000

Sewage Works Revenue Bonds of 2011 - Interest rates 3% - 4% - Original issue $21,500,000 - Installments of $760,000 to $1,510,000 plus interest - Maturity December 1, 2031 15,480,000

72 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 9 - Long-term Debt (Continued) Water Works Revenue Bonds of 2012 - Interest rates 2% - 3.7% - Original issue $8,300,000 - Installments of $340,000 to $540,000 plus interest - Maturity January 1, 2033 6,570,000

Sewage Works Revenue Bonds Series 2012 - Interest rates 2% - 2.75% - Original issue $25,000,000 - Installments of $1,105,000 to $1,650,000 plus interest - Maturity December 1, 2032 18,755,000

Sewage Works Refunding Revenue Bonds of 2013A - Interest rate 1.94% - Original issue $14,765,000 - Installments of $715,000 to $1,065,000 plus interest - Maturity December 1, 2024 4,100,000

Sewage Works Refunding Revenue Bonds of 2015 - Interest rate 2% - Original issue $27,440,000 - Installments of $2,475,000 to $3,025,000 plus interest - Maturity December 1, 2025 19,850,000

Water Works Refunding Revenue Bonds of 2016 - Interest rate 3% - Original issue $3,300,000 - Installments of $260,000 to $440,000 plus interest - Maturity January 1, 2027 2,895,000

Total Business-Type Revenue Bonds 80,085,000

Total Business-Type Activities $ 84,974,955

73 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 9 - Long-term Debt (Continued) Notes and Loans Payable Notes and loans payable outstanding at December 31, 2018 are as follows:

Purpose Outstanding

Governmental Activities Indiana Development Finance Authority (Bosch Project) Interest rate: 3.034% Original issue: $1,040,000 $ 172,818 Installments of $18,003 per quarter, includes interest Maturity: March 22, 2021 2015 Century Center Energy Conservation Bond Interest rates: 3.5% Original issue: $4,167,897 3,936,004 Installments of $22,585 to $176,508 plus interest Maturity: May 1, 2031 Total governmental activities $ 4,108,822 Business type Activities 2009 Water Works State Revolving Loan Interest rate: 3.37% Original issue: $427,332 $ 311,650 Installments of $17,719 to $29,459 plus interest Maturity: January 1, 2030 2009 Sewage Works State Revolving Loan Interest rate: 2.81% Original issue: $3,297,000 1,920,133 Installments of $130,201 to $220,378 plus interest Maturity: December 1, 2028 Total business type activities $ 2,231,783

Other Long-term Liabilities Compensated absences for governmental activities typically have been liquidated from the General Fund and special revenue funds. All of the December 31, 2018 business-type activities' compensated absences are due within one year. The net 1925 Police and 1937 Firefighters' pension liability will be liquidated from the pension trust funds. The Public Employees' Retirement Fund (PERF) liability will not be liquidated from the pension trust funds. The total OPEB liability will be liquidated from the General Fund. Debt Service Requirements to Maturity Annual debt service requirements to maturity for the above bonds and note obligations are as follows:

74 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 9 - Long-term Debt (Continued)

Governmental Activities Business-type Activities Principal Interest Total Principal Interest Total 2019 $ 10,490,564 $ 5,600,011 $ 16,090,575 $ 9,161,339 $ 2,822,926 $ 11,984,265 2020 10,227,967 5,256,460 15,484,427 7,733,376 2,346,547 10,079,923 2021 10,610,632 4,884,199 15,494,832 7,910,986 2,149,441 10,060,427 2022 10,410,874 4,451,935 14,862,808 8,096,301 1,948,819 10,045,120 2023 10,081,274 4,010,307 14,091,581 7,892,376 1,737,211 9,629,587 2024-2028 38,388,322 14,952,581 53,340,903 30,042,901 5,580,284 35,623,185 2029-2033 38,722,950 8,237,382 46,960,331 16,369,459 1,294,651 17,664,110 2034-2038 19,859,505 1,791,428 21,650,932 - - - Totals $ 148,792,087 $ 49,184,303 $ 197,976,389 $ 87,206,738 $ 17,879,881 $ 105,086,619

Note 10 - Restricted Assets At December 31, 2018, the balances of restricted assets in the enterprise funds are comprised of the following:

Century Consolidated Total Water Wastewater Center Building Solid Waste EMS Cash, cash equivalents, and investments: Debt service fund $ 2,689,746 $ 1,726,068 $ 963,678 $ - $ - $ - $ - Customer repair and deposit fund 3,518,128 1,298,632 2,219,496 - - - - Cash with fiscal agent 1,328,716 33,038 435,558 - 107,827 132,488 619,805 Bond reserve fund 5,594,265 1,390,019 4,204,246 - - - - Operating reserve fund 8,049,617 2,663,671 5,385,946 - - - - Capital outlay accounts 13,847,434 1,888,226 9,100,782 857,363 - 44,495 1,956,568 Total restricted assets $ 35,027,906 $ 8,999,654 $ 22,309,706 $ 857,363 $ 107,827 $ 176,983 $ 2,576,373

Cash with fiscal agent includes $1,124,436 for capital asset purchases and $204,280 for debt purchases. Note 11 - Property Held for Resale The City's Redevelopment Commission has purchased properties in blighted areas for redevelopment and subsequent resale. At December 31, 2018, the market value of these properties was not known. These properties are recognized as assets in the funds that purchased the property. Note 12 - Service Concession Agreement On July 1, 2013, the City entered into a Service Concession Agreement (SCA) with SMG, a civic center management company, with the purpose of obtaining high-quality professional management of the Century Center. The initial term of the contract extends through June 30, 2016, has been extended through December 31, 2019, and is renewable for an additional three-year period. SMG’s compensation is a flat fee of $135,000 for the first year and is then adjusted by the CPI (Consumer Price Index) for each successive year. There are also additional financial incentives based on various operational goals. SMG is responsible for all operations and financial reporting. Additionally, SMG contributed a one-time capital infusion of $575,000, to be used for capital improvement that will be amortized over seventy-two (72) months. Both parties retain certain rights regarding operations and contract cessation.

75 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 13 - Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; job-related illnesses or injuries to employees; medical benefits provided to employees, retirees, and dependents; and natural disasters. The risks of torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters are covered by commercial insurance from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage for the past three years. There were no significant reductions in insurance by major category of risk. Liability Insurance The City has chosen to establish a risk financing fund for risks associated with job-related illnesses or injuries to employees, automobile liability, and comprehensive liability. The risk financing fund is accounted for in the Liability Insurance Premium Reserve Fund, an internal service fund, whereby assets are set aside for claim settlements. Excess policies through commercial insurance covers individual claims in excess of $400,000 per claim for job- related illnesses or injuries to employees (workers' compensation) and claims for damage to and destruction of assets (property damage) with various self-retention amounts. In recent years, claims resulting from property damage exceeded the property insurance self- retention amount. Claims resulting from this risk exceeded the self-retention amount during 2016, 2017, and 2018 by $425,000, $218,522, and $ 238,638, respectively. A premium is charged to each fund based on a study of paid claims and based on the number of employees and percent of the total budget. Provisions are also made for unexpected and unusual claims. In February, 2018, heavy rainfall resulted in flooding that damaged several City-owned parks and trails along the St. Joseph River, along with a pumping station owned by the City’s utilities. The extent of the damage is still being assessed, but will be far in excess of the City’s property damage insurance deductible. A significant portion of this repair cost will be recouped through the City’s insurance plan and through the Federal Emergency Management Agency (FEMA). Claim expenditures and liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported (IBNRs). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts, and other economic and social factors. The entire insurance liability balance is reported as a current liability as the City has the intent to pay within one year. Group Health Insurance The City has chosen to establish a risk financing fund for risks associated with medical benefits of employees and their covered dependents. The risk financing fund is accounted for in the Self-Funded Employee Benefits Fund, an internal service fund, whereby assets are set aside for benefit costs. An excess policy through commercial insurance covers individual claims in excess of $300,000 per year. Claims resulting from this risk exceeded the self-retention amount during 2016, 2017, and 2018 by $1,585,602, $109,466, and $347,097, respectively. A premium is charged to each fund based on the number of employees and estimated costs exceeding the employees' contributions. Provisions are also made for unexpected and unusual claims.

76 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 13 - Risk Management (Continued) Claim expenditures and liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported (IBNRs). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts, and other economic and social factors. Changes in the estimated liability for the past two fiscal years were as follows:

Liability Insurance Group Health 2018 2017 2018 2017 Unpaid claims - Beginning of year $ 1,175,541 $ 1,303,401 $ 934,220 $ 1,014,214 Incurred claims, including claims incurred but not reported 2,932,213 686,896 14,423,269 13,366,020 Claim payments (1,967,828) (814,756) (14,438,474) (13,446,014) Unpaid claims - End of year $ 2,139,926 $ 1,175,541 $ 919,015 $ 934,220

Note 14 - Subsequent Events Update On January 14, 2019, the Common Council of the City of South Bend approved a $2 per month fee to increase sewer bills, with the intention to speed implementation of the City’s Stormwater system.

On February 28, 2012, the City, the United States of America, and the State of Indiana, agreed to a consent decree to resolve claims against the City for alleged violations of the Clean Water Act. The decree includes several provisions, including a long term control plan that requires the City to complete a construction program by December 31, 2031 at a cost of approximately $509.5 million in 2007 dollars to comprehensively upgrade and expand the City's sewage collection, storage, conveyance, and treatment system. Under this agreement South Bend was required to undertake a review of the Plan after 5 years and this review was completed in 2017. The review resulted in a revised plan that calls for a reduced investment of $200 million in 2017 dollars. The plan will meet the same environmental goals and will still run to 2031. South Bend is currently working with State and Federal environmental regulators to have this new more cost efficient plan formally endorsed.

Note 15 - Conduit Debt Obligation From time to time, the City has issued conduit debt obligations to provide financial assistance to private sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2018 there were several series of conduit debt obligations outstanding. The City has been unable to obtain the total outstanding principal amount for the outstanding bonds. During 2018 the City approved no new conduit debt obligations.

77 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 16 - Fund Balance Constraints The detail of the various components of fund balance is as follows:

Parks and Public River West Nonmajor General Fund Recreation Safety LOIT COIT EDIT Rainy Day TIF Funds Total Fund Balances

Nonspendable: Advances to other funds $ 425,680 ------$ 425,680 Inventory - 22,322 ------22,322 Property held for resale ------Noncurrent loans receivable ------Total 425,680 22,322 ------448,002

Restricted: Debt service ------11,252,528 11,252,528 General administration ------2,951,636 2,951,636 Police and fire salaries - - 1,837,077 - - - - - 1,837,077 Police and fire projects ------963,193 963,193 Street maintenance ------13,227,338 13,227,338 Economic development projects ------38,008,486 42,324,128 80,332,614 Parks maintenance - 7,373,139 ------7,373,139 Public safety capital projects ------6,199,225 6,199,225 Cultural capital projects ------23,085,591 23,085,591 Street capital projects ------5,586,780 5,586,780 Total - 7,373,139 1,837,077 - - - 38,008,486 105,590,419 152,809,121

Committed: General administration ------1,164,412 1,164,412 Street capital projects ------Police and fire programs ------134,055 134,055 Economic development projects ------1,009,806 1,009,806 Cultural capital ------901,227 901,227 Total ------3,209,500 3,209,500

Assigned: General administration 820,914 - - 11,635,392 15,266,520 10,468,726 - - 38,191,552 Police and fire capital ------2,337 2,337 Street maintenance ------625,465 625,465 Economic devlopment administration ------709,547 709,547 Total 820,914 - - 11,635,392 15,266,520 10,468,726 - 1,337,349 39,528,901

Unassigned 37,383,206 ------37,383,206

Total fund balance $ 38,629,800 $ 7,395,461 $ 1,837,077 $ 11,635,392 $ 15,266,520 $ 10,468,726 $ 38,008,486 $ 110,137,268 $ 233,378,730

Public Safety LOIT funds are primarily restricted for payment of police and fire personnel. Parks and Recreation funds are restricted primarily for parks and recreation operating costs, including personnel. COIT and EDIT funds are assigned to general government primarily for debt service payments and operating expenses. River West TIF and Redevelopment Authority Debt Service are restricted for economic development projects and debt service. The government-wide statement of net position reports restricted net position for debt service and capital outlay, which is restricted by enabling legislation.

78 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 17 Segment Information

Types of Goods or Services Provided: Emergency Medical Services: Used to account for the operations and purchases of necessary equipment for the Fire Department and Emergency Medical Services Department.

Condensed Statement of Net Position Assets: Cash and cash equivalents $ 4,099,519 Receivables 1,448,972 Prepaid items 8,859 Restricted cash and cash equivalents 2,576,373 Capital assets (net of accumulated depreciation) 4,263,727 Total assets 12,397,450 Liabilities: Current liabilities 1,144,652 Mortgage bonds payable, net 4,521,868 Capital leases payable 1,271,825 Total liabilities 6,938,345 Net position: Net investment in capital assets (1,706,507) Restricted 2,083,004 Unrestricted 5,082,608 Total net position $ 5,459,105

Condensed Statement of Revenues, Expenses, and Changes in Net Position Operating revenues $ 6,727,643 Other operating expenses (7,231,819) Depreciation expense (494,269) Operating income (998,445) Nonoperating revenues (expenses): Interest revenue 133,136 Interest expense (196,599) Loss on exchange of capital assets (1,064,653) Interfund transfers in 25,425 Interfund transfers out (221,939) Change in net position (2,323,075) Total net position - beginning, restated 7,782,180 Total net position - ending $ 5,459,105

Condensed Statement of Cash Flows: Net cash provided (used) by: Operating activities $ 720,871 Noncapital financing activities (196,514) Capital and related financing activities (226,228) Investing activities 450,073 Net increase in cash and cash equivalents 748,202 Cash and cash equivalents, January 1 1,895,912 Cash and cash equivalents, December 31 $ 2,644,114

79 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 18 – Other Postemployment Benefits Plan Description The City of South Bend Retiree Healthcare Plan (SBRHP) is a single-employer defined benefit healthcare plan administered by the City of South Bend, Department of Administration and Finance, through the City's self-insurance fund. Indiana Code 5-10-8 gives the unit the authority to establish and amend the plan. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement 75. The City issues a publicly available financial report that includes financial statements and required supplementary information for the plan. The report is available by contacting the City Controller's office: 227 West Jefferson Blvd. Rm. 1200N, South Bend, IN 46601, Ph. (574) 235-9216. Benefits Provided and Funding Policy SBRHP provides for medical insurance benefits to eligible retirees and their spouses. Police officers and firefighters are eligible for retiree health coverage once they attain age 50 with 20 years of service. General employees are eligible for retiree health coverage upon satisfaction of: Rule of 85 and age 55; or Age 65 with 10 years of service; or Age 60 with 15 years of service Health care coverage ceases when the retiree or dependent reaches age 65. The contribution requirements of plan members for the City of South Bend Retiree Healthcare Plan are established and can be amended by the City's Common Council. The required contribution is based on projected "pay-as-you-go" financing requirements. For the year ended December 31, 2018, the City contributed $758,730 to the plan for current premiums. Police and fire members receiving benefits contributed approximately 37 percent of the total premiums through their required contribution of $214 per month for retiree-only coverage and approximately 43 percent of the total premiums through their required contribution of $643 for retiree and spouse coverage. General employee members receiving benefits contributed approximately 100 percent of the total premiums through their required contribution of $605 and $552 per month for retiree-only coverage and $1,587 and $1,429 for retiree and spouse coverage for the PPO and HDHP plans, respectively. Employees Covered by Benefit Terms At December 31, 2018, the following employees were covered by the benefit terms:

Active employees with coverage 950 Active employees without coverage 147 Retirees 69 1,166

80 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 18 – Other Postemployment Benefits (Continued) Total OPEB Liability The City’s total OPEB liability of $23,206,087 was measured as of December 31, 2018, and was determined by an actuarial valuation as of that date. Actuarial Assumptions and Other Inputs The total OPEB liability in the December 31, 2018 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:

Inflation 2.25 percent per year Salary increases 2.25 percent, average, including inflation Discount rate 4.11 pecent as of December 31, 2018 and 3.44% as of January 1, 2018 9.0 percent for 2018, decreasing 0.5 percent per year to an ultimate rate of Healthcare cost trend rates 4.5 percent for 2027 and later years approximately 37 percent for projected health insurance premiums for retirees Retirees' share of benefit-related costs and approximately 43% fore retiree and spouse

The discount rate was based on a yield for 20-year tax-exempt general obligation municipal bonds (Bond Buyer Go 20) with an average rating of AA/Aa or higher (or equivalent quality on another rating scale). Mortality rates for healthy retirees were based on the SOA RPH-2018 Total Dataset Mortality Table fully generational using Scale MP-2018 (RPH-2018 table is created based on RPH-2014 mortality tables with 8 years of MP-2014 mortality improvement backed out, projected to 2018 using MP-2018 improvement.) The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study for the year ending December 31, 2007. The healthcare coverage election rate was 65% for active police and fire with current coverage, 40% for active general employees with current coverage, and 0% for active employees with no coverage. Changes in the Total OPEB Liability Total OPEB Liability Balance at 1-1-18 $ 28,740,294 Changes for the year: Service cost 1,489,465 Interest 1,026,964 Changes in benefit terms - Differences between expected and actual experience 1,503,991 Changes in assumptions or other inputs (8,795,897) Benefit payments (758,730) Net changes (5,534,207) Balance at 12-31-18 $ 23,206,087

81 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 18 – Other Postemployment Benefits (Continued) There have been no substantive plan provision changes since the last full valuation, which was for the fiscal year ending December 31, 2017. Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (3.11 percent) or 1-percentage-point higher (5.11 percent) than the current discount rate:

1% Decrease Discount Rate 1% Increase (3.11%) (4.11%) (5.11%)

Net OPEB Liability $ 25,419,539 $ 23,206,087 $ 21,189,095

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1- percentage-point lower (8.5 percent decreasing to 4.5 percent) or 1-percentage-point higher (10.5 percent decreasing to 6.5 percent) than the current healthcare cost trend rates:

Healthcare 1% Decrease Cost Trend 1% Increase (7.5% Rates (8.5% (9.5% decreasing decreasing decreasing to 3.5% to 4.5% to 5.5%

Total OPEB Liability $ 20,632,692 $ 23,206,087 $ 26,230,303

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended December 31, 2018, the City recognized OPEB expense of $1,853,528. At December 31, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows of Resources of Resources Difference between expected and actual $ 1,367,265 $ - experience Changes in assumptions or other inputs - (7,996,270) Total $ 1,367,265 $ (7,996,270)

82 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 18 – Other Postemployment Benefits (Continued) Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year ended December 31:

2019 $ (662,901) 2020 (662,901) 2021 (662,901) 2022 (662,901) 2023 (662,901) Thereafter (3,314,500)

Note 19 - Pension Plans Plan Description Public Employees' Retirement Fund The Public Employees' Retirement Fund, a cost-sharing multiple-employer plan, administered by the Indiana Public Employees' Retirement Plan (INPRS) Board, provides pensions for all full-time employees other than police officers and firefighters, who are covered under the 1977 Police Officers' and Firefighters' Pension and Disability Fund. The pension system issues a publicly available financial report that can be obtained at http://www.inprs.in.gov. 1977 Police Officers' and Firefighters' Pension and Disability Fund The 1977 Police Officers' and Firefighters' Pension and Disability Fund, a cost-sharing multiple-employer plan administered by the Indiana Public Employees' Retirement Plan (INPRS) Board, provides pensions for all police officers and firefighters hired after April 30, 1977. The pension system issues a publicly available financial report that can be obtained at http://www.inprs.in.gov. 1925 Police Officers' Pension Plan The City contributes to the 1925 Police Officers' Pension Plan, a single-employer defined benefit pension plan administered by the local pension board as authorized by state statute (IC 36 8 6). The financial statements of the plan are included in these financial statements as a pension and other employee benefit trust fund (a fiduciary fund). Management of the 1925 Police Officers' Pension plan is vested in the pension board, which consists of nine members - six elected by plan members, the Mayor, the Chief, and the City Controller. The pension plan is closed to new entrants.

83 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) 1937 Firefighters' Pension Plan The City contributes to the 1937 Firefighters' Pension Plan, a single-employer defined benefit pension plan administered by the 1937 Firefighters' Pension Plan Board as authorized by state statute (IC 36 8 6). The financial statements of the plan are included in these financial statements as a pension and other employee benefit trust fund (a fiduciary fund). Management of the 1937 Firefighters' Pension Plan is vested in the pension board. The pension plan is closed to new entrants. Benefits Provided Public Employees' Retirement Fund These plans provide retirement, disability and survivor benefits for public employees not covered by the 1977 Police Officers’ and Firefighters’ Pension and Disability Fund. The Indiana Code, Title 5, Articles 10.2 and 10.3, as amended only by the Indiana General Assembly, identifies the benefit provisions and establishes the authority under which members and employers are obligated to contribute to the plan. The City of South Bend participates in two different plans for non-Public Safety positions: the PERF Hybrid Plan and the My Choice Retirement Savings Plan. • PERF Hybrid Plan: Retirement benefits for employees are calculated as years of credible service times the average highest 20 quarters of salary times 1.1 percent plus the employee's Annuity Savings account. Normal retirement ages are age 65 and 10 years (eight years for certain elected officials) of creditable service, age 60 and 15 years of creditable service, and age 55 if age and creditable service total at least 85, with early retirement at 50 with 15 years of service. Vesting period is 10 years. An employee who leaves service may withdraw his or her Annuity Savings Account contributions, plus any accumulated interest. Benefit terms provide for annual cost of living adjustments to each employee's retirement allowance subsequent to the employee's retirement date. The annual adjustments are granted by the Indiana General Assembly on an ad hoc basis. • My Choice Retirement Savings Plan: No defined benefit for employee. Employee contributions are fully vested upon hire, employer contributions to employee account are vested based upon full years of participation (20% per year – 5 full years for 100% vesting). 1977 Police Officers' and Firefighters' Pension and Disability Fund The plan provides retirement, disability, and death benefits. Benefit terms are established and amended by State legislative action. Annual retirement benefits for employees are calculated as 50 percent of first-class salary for 20 years of service plus one percent for each six months of active service over 20 years up to a maximum of 12 years (for a total of 32 years of service and 74 percent of salary).. Normal retirement age is 52 with 20 years of creditable service, with early retirement at 50. Employees are eligible for non duty disability benefits after five years of service and for duty related disability benefits upon hire. Disability retirement benefits are determined in the same manner as retirement benefits but are payable immediately without an actuarial reduction.

84 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) Death benefits equal the benefit which would have been payable to a beneficiary if the member had retired at age 50 or at death, whichever is later, under an effective election of the joint and survivor option available for retirement benefits. An employee who leaves service may withdraw his or her contributions, plus any accumulated interest. Benefit terms provide for annual cost-of-living adjustments to each employee’s retirement allowance subsequent to the employee’s retirement date. The annual adjustments are determined by statue equal to the change in the Consumer Price Index but not in excess of a 3 percent increase. 1925 Police Officers' Pension Plan The plan provides retirement, disability, and death benefits to plan members and beneficiaries. The plan was established by the plan administrator, as provided by state statute. The financial statements of the plan are included in these financial statements as a pension trust fund (a fiduciary fund). 1937 Firefighters' Pension Plan The plan provides retirement, disability, and death benefits to plan members and beneficiaries. The plan was established by the plan administrator, as provided by state statute. The financial statements of the plan are included in these financial statements as a pension trust fund (a fiduciary fund). Employees Covered by Benefit Terms The following members were covered by the benefit terms:

1925 Police Officers' 1937 Firefighters' Pension Plan Pension Plan Date of member count December 31, 2018 December 31, 2018 Inactive plan members or beneficiaries currently receiving benefits 201 152 Active plan members 4 4 Total employees covered by the plan 205 156

Contributions Public Employees' Retirement Fund Per Indiana Code, Title 5, Articles 10.2 and 10.3, the contribution requirements of the active employees and the participating employers are established and may be amended by the INPRS Board based on recommendations by the INPRS actuary. Employees are required to contribute 3 percent of their annual pay. The City’s contractually required contribution rate for the year ended December 31, 2018 was 11.2 percent of annual payroll. Contributions to the plan from the City were $3,385,879 for the year ended December 31, 2018.

85 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) 1977 Police Officers' and Firefighters' Pension and Disability Fund Per Indiana State statute (IC 36 8 8 and IC 36 8 8.5), the contribution requirements of the active employees and the participating employers are established and may be amended by the INPRS Board based on recommendations by the INPRS actuary. Employees are required to contribute 6 percent of their annual pay. The City’s contractually required contribution rate for the year ended December 31, 2018 was 17.5 percent of annual payroll. Contributions to the plan from the City were $5,170,797 for the year ended December 31, 2018. 1925 Police Officers' Pension Plan Plan members are required by state statute (IC 36 8 6 4) to contribute an amount equal to six percent (6 percent) of the salary of a first class patrolman. The contribution requirements of plan members are established by state statute. The City's annual pension cost and related information, as provided by the actuary, is presented in this note. The net pension liability (NPL) is considered an obligation of the City and is reflected in the statement of net position. The State of Indiana is required by statute to reimburse the City for benefits paid and has contributed $6,223,858 during 2018 on behalf of the City. The City has recognized these on behalf payments as intergovernmental revenue and public safety expenditures in the General Fund. 1937 Firefighters' Pension Plan Plan members are required by state statute (IC 36 8 7 8) to contribute an amount equal to six percent (6 percent) of the salary of a first class firefighter. The contribution requirements of plan members are established by state statute. The City's annual pension cost and related information, as provided by the actuary, is presented in this note. The net pension liability (NPL) is considered an obligation of the City and is reflected in the statement of net position. The State of Indiana is required by statute to reimburse the City for benefits paid and has contributed $4,475,669 during 2018 on behalf of the City. The City has recognized these on behalf payments as intergovernmental revenue and public safety expenditures in the General Fund. Net Pension Liability The City chooses a date for each pension plan to measure its net pension liability. This is based on the measurement date of each pension plan, which may be based on a comprehensive valuation as of that date or based on an earlier valuation that has used procedures to roll the information forward to the measurement date.

1977 Police Officers’ and Public Firefighters Employees’ Pension and Retirement Disability 1925 Police Officers’ 1937 Firefighters’ Fund Fund Pension Plan Pension Plan Measurement date used for the City NPL June 30, 2018 June 30, 2018 December 31, 2018 December 31, 2018 Based on a comprehensive actuarial valuation as of June 30, 2018 June 30, 2018 December 31, 2018 December 31, 2018

86 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) Changes in the net pension liability during the measurement year were as follows: 1925 Police Officers' Pension Plan

Increase (Decrease) Changes in Net Pension Liability Total Pension Liability Plan Net Position Net Pension Liability Balance at December 31, 2017 $ 85,694,021 $ 885,316 $ 84,808,705 Service cost 92,916 - 92,916 Interest 2,337,437 - 2,337,437 Changes in benefits - - - Differences between expected 2,284,134 - 2,284,134 and actual experience Changes in assumptions (2,697,730) - (2,697,730) Contributions Employer - - - Non-employer contributing - 6,220,658 (6,220,658) entity contributions Contributions Employee - - - Net investment income - 15,219 (15,219) Other revenue - - - Benefit payments, including (6,146,696) (6,161,954) 15,258 refunds Administrative expenses - (10,054) 10,054 Miscellaneous other charges - - - Net changes: (4,129,939) 63,869 (4,193,808)

Balance at December 31, 2018 $ 81,564,082 $ 949,185 $ 80,614,897

The plan's fiduciary net position represents 1.16 percent of the total pension liability.

87 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) 1937 Firefighters' Pension Plan

Increase (Decrease) Changes in Net Pension Liability Total Pension Liability Plan Net Position Net Pension Liability Balance at December 31, 2016 $ 68,671,131 $ 466,258 $ 68,204,873 Service cost 98,529 - 98,529 Interest 1,815,032 - 1,815,032 Changes in benefits - - - Differences between expected (482,208) - (482,208) and actual experience Changes in assumptions (2,105,211) - (2,105,211) Contributions Employer - - - Non-employer contributing - 4,472,469 (4,472,469) entity contributions Contributions Employee - - - Net investment income - 7,596 (7,596) Other revenue - - - Benefit payments, including (4,572,612) (4,618,617) 46,005 refunds Administrative expenses - (12,154) 12,154 Miscellaneous other charges - - - Net changes: (5,246,470) (150,706) (5,095,764)

Balance at December 31, 2017 $ 63,424,661 $ 315,552 $ 63,109,109

The plan's fiduciary net position represents 0.50 percent of the total pension liability. Public Employees' Retirement Fund At December 31, 2018, the City reported a liability of $19,812,587 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's actuarially required contribution for the year ended December 31, 2018, relative to all other contributing employers. At June 30, 2018, the City's proportion was 0.58323 percent, which was an increase of 0.00335% from its proportion measured as of June 30, 2017. 1977 Police Officers' and Firefighters' Pension and Disability Fund At December 31, 2018, the City reported a pension asset of $3,021,911 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2018 and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of that date. The City's proportion of the net pension asset was based on the City's actuarially required contribution for the year ended December 31, 2018, relative to all other contributing employers. At June 30, 2018, the City's proportion was 3.43746 percent, which was a decrease of 0.06148 from its proportion measured as of June 30, 2017.

88 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At December 31, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Public Employees' Retirement Fund

Deferred Outflows Deferred Inflows of of Resources Resources

Difference between expected and actual experience $ 259,110 $ 1,353 Changes in assumptions 47,204 3,181,186 Net difference between projected and actual earnings 586,771 - on pension plan investments Employer contributions to the plan subsequent to the 1,675,591 - measurement date Changes in proportion and difference between employer contributions and proportionate share of 498,568 49,376 contributions Total $ 3,067,244 $ 3,231,915

1977 Police Officers' and Firefighters' Pension and Disability Fund Deferred Outflows Deferred Inflows of Resources of Resources Difference between expected and actual experience $ 5,590,194 $ 1,395,089 Changes in assumptions - 6,696,031 Net difference between projected and actual earnings 1,031,376 - on pension plan investments Employer contributions to the plan subsequent to the 2,792,597 - measurement date Changes in proportion an ddifferences between employer contributions and proportionate share of contributions 96,299 108,415 Total $ 9,510,466 $ 8,199,535

1925 Police Officers' Pension Plan Deferred Outflows of Resources Investment experience $ 219

1937 Firefighters' Pension Plan Deferred Outflows of Resources Investment experience $ 451

89 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows (note that employer contributions subsequent to the measurement date will reduce the net pension liability and therefore will not be included in future pension expense): Public Employees' Retirement Fund

Years Ending Amount June 30 2019 $ 713,093 2020 (756,855) 2021 (1,445,612) 2022 (350,888) 2023 - Thereafter -

Total $ (1,840,262)

1977 Police Officers' and Firefighters' Pension and Disability Fund

Years Ending Amount June 30 2019 $2,195,568 2020 (282,100) 2021 (2,121,866) 2022 (1,693,730) 2023 (702,005) Thereafter 1,122,467

Total $ (1,481,666)

1925 Police Officers' Pension Plan Years Ending June 30 Amount 2019 $ 55 2020 55 2021 55 2022 54 2023 -

Total $ 219

90 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued)

1937 Firefighters' Pension Plan

Years Ending Amount June 30 2019 $ 113 2020 113 2021 113 2022 112 2023 -

Total $ 451

Actuarial Assumptions The total pension liability in each actuarial valuation was determined using the following actuarial assumptions applied to all periods included in the measurement: 1977 Police Officers’ and Public Firefighters 1925 Police 1937 Employees’ Pension and Officers’ Pension Firefighters’ Retirement Fund Disability Fund Plan Pension Plan

Inflation 2.25% 2.25% 2.25% 2.25% Salary increases including inflation) 2.5-4.25% 2.50% 2.50% 2.50% Investment rate of return (net of investment expenses) 6.75% 6.75% 1.75% 1.75% Mortality rates RP-2014 RP-2014 Blue RP-2014 Blue RP-2014 Blue Mortality Table Collar Set Collar Set Collar Set with adjustments Mortality Table Mortality Table Mortality Table for mortality with adjustments with adjustments with adjustments improvements for mortality for mortality for mortality based on Social improvements improvements improvements Security Administration based on Social based on Social based on Social 2014 Trustee report Security Admin. Security Admin. Security Admin. 2014 Trustee Rpt. 2014 Trustee Rpt. 2014 Trustee Rpt. The actuarial assumptions used in the June 30, 2018 actuarial valuation date valuation were based on the results of an actuarial experience study for the four years ended June 30, 2014 update. Discount Rate As shown below, the discount rate used to measure the total pension liability was determined after considering a projection of the cash flows to determine whether the future contributions (made at the current contribution rates) will be sufficient to allow the pension plans' fiduciary net position to make all projected future benefit payments of current active and inactive employees.

91 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense, and inflation) are developed for each major asset class. These ranges are combined to produce the long- term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation update. 1977 Police Officers’ and Public Firefighters 1925 Police 1937 Employees’ Pension and Officers’ Pension Firefighters’ Retirement Fund Disability Fund Plan Pension Plan

Assumed investment rate of return 7.50% 7.25% 1.75% 1.75%

Are contributions expected to be sufficient to allow fiduciary net position to pay future benefits? Yes Yes No No

Discount rate used to measure TPL 6.75% 6.75% 3.10% 3.10%

1925 Police Officers' Pension Plan's and 1937 Firefighters' Pension Plan's fiduciary net position were not projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate incorporates a municipal bond rate which was 3.10 percent. The source of that bond rate was the Barclay's 20-year Municipal Bond (as referenced in The Wall Street Journal, December 31, 2017). Investment Rate of Return Best estimates of arithmetic real rates of return as of the June 30, 2018 measurement date for the Public Employees’ Retirement Fund and 1977 Police Officers’ and Firefighters’ Pension and Disability Fund and December 31, 2018 measurement date for the 1925 Police Officers’ Pension Plan and 1937 Firefighters’ Pension Plan, and for each major asset class included in the pension plan's target asset allocation, as disclosed in the investment footnote, are summarized in the following tables:

Public Employees' Retirement Fund and 1977 Police Officers' and Firefighters' Pension and Disability Fund Long term Expected Asset Class Target Allocation Real Rate of Return

Public Equity 22% 4.4% Private Equity 14% 5.4% Fixed Income - Ex Inflation-Linked 20% 2.2% Fixed Income - Inflation-Linked 7% 0.8% Commodities 8% 2.3% Real Estate 7% 6.5% Absolute Return 10% 2.7% Risk Parity 12% 5.2%

92 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) 1925 Police Officers' Pension Plan

Long term Expected Asset Class Real Rate of Return

Cash or cash equivalents 1.75% Fixed income investments 1.75%

1937 Firefighters' Pension Plan Long term Expected Asset Class Real Rate of Return

Cash or cash equivalents 1.75% Government agency securities 1.75%

Sensitivity of the Net Pension Liability to Changes in the Discount Rate 1% Decrease Discount 1% Increase (5.75%) (6.75%) (7.75%)

Public Employees' Retirement Fund $ 31,188,196 $ 19,812,587 $ 10,326,568 1977 Police Officers' and Firefighters' Pension and Disability Fund $ 28,711,015 $ (3,021,911) $ (28,672,587)

1% Decrease Discount 1% Increase (2.10%) (3.10%) (4.10%) 1925 Police Officers' Pension Plan $ 88,039,465 $ 80,614,897 $ 72,544,393 1937 Firefighters' Pension Plan $ 69,419,473 $ 63,109,109 $ 57,170,585

Public Employees’ Retirement Fund, and 1977 Police Officers' and Firefighters' Pension and Disability Fund Detailed information about the plan’s fiduciary net position is available in a separately issued financial report available at www.in.gov/inprs/files/2018_INPRSCAFRBook.pdf. The plan’s fiduciary net position has been determined on the same basis used by the plan. The plan uses the economic resources measurement focus and the full accrual basis of accounting. Investments are stated at fair value. Contribution revenue is recorded as contributions are due, pursuant to legal requirements. Benefit payments and refunds of employee contributions are recognized as expense when due and payable in accordance with the benefit terms.

93 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) 1925 Police Officers' Pension Plan The financial statements of the plan are included in these financial statements as a pension and other postemployment benefit trust fund. For the purpose of measuring the net pension liability, deferred outflows of resources, and deferred inflows or resources related to pension and pension expense, information about the plan’s fiduciary net position and addition to/deduction from fiduciary net position have been determined on the same basis as they are report by the plan. The plan uses the economic resources measurement focus and the full accrual basis of accounting. Investments are stated at fair value. Contribution revenue is recorded as contributions are due, pursuant to legal requirements. Benefit payments and refunds of employee contributions are recognized as expense when due and payable in accordance with the benefit terms. 1937 Firefighters' Pension Plan The financial statements of the plan are included in these financial statements as a pension and other postemployment benefit trust fund. For the purpose of measuring the net pension liability, deferred outflows of resources, and deferred inflows or resources related to pension and pension expense, information about the plan’s fiduciary net position and addition to/deduction from fiduciary net position have been determined on the same basis as they are report by the plan. The plan uses the economic resources measurement focus and the full accrual basis of accounting. Investments are stated at fair value. Contribution revenue is recorded as contributions are due, pursuant to legal requirements. Benefit payments and refunds of employee contributions are recognized as expense when due and payable in accordance with the benefit terms. Assumption Changes The actuarial assumptions used in the Public Employees Retirement Fund (PERF) and the 1977 Police Officers’ and Firefighters’ Pension and Disability Fund were the same assumptions used in the 2017 valuations, except for the PERF COLA assumption. The PERF COLA assumption was changed due to passage of Senate Enrolled Act No. 373. In lieu of a 1% COLA occurring beginning on January 1, 2020, the Plan now assumes that the COLA will be replaced by a 13th check for 2020 and 2021. The COLA assumption thereafter would be 0.4% beginning on January 1, 2022, changing to 0.5% beginning on January 1, 2034, and ultimately 0.6% beginning on January 1, 2039. Investment Policy The 1925 Police Officers' Pension Plan and the 1937 Firefighters' Pension plan’s policy in regard to the allocation of invested assets is established and may be amended by the pension board by a majority vote of its members. It is the policy of the pension board to pursue an investment strategy that manages risk through the prudent diversification of the portfolio across a broad selection of distinct asset classes. The pension plan’s investment policy discourages the use of cash equivalents, except for liquidity purposes, and aims to refrain from dramatically shifting asset class allocations over short time spans. The following was the pension board’s adopted asset allocation policy as of December 31, 2018:

94 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 19 - Pension Plans (Continued) Asset Class Target Allocation Cash or cash equivalents 24% Government agency securities 76 Rate of Return For the year ended December 31, 2018, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 9.3 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. The total aggregate amounts, for all City plans, of employer’s pension liability, deferred outflows of resources, deferred inflows of resources and pension expenditures for the period associated with net pension liabilities is as follows:

Pension Net Pension Expenses Deferred Deferred Plan Description Liability (Income) Inflows Outflows

Public Employees' Retirement Fund $ 19,812,587 $ 3,302,670 $ 3,231,915 $ 3,067,244 1977 Police Officers and Firefighters Pension and Disability Fund * - 3,569,554 8,199,535 9,510,466 1925 Police Officers' Pension Plan 80,614,897 2,001,319 - 219 1937 Firefighters' Pension Plan 63,109,109 (681,905) - 451

Total Aggregate Amounts $ 163,536,593 $ 8,191,638 $ 11,431,450 $ 12,578,380

* - 1977 Police Officers' and Firefighters' Pension and Disability Fund recognizes a $3,021,911 net pension asset as of December 31, 2018.

Note 20 - Pension Trust Funds The following are condensed financial statements for the individual pension plans:

1925 Police Pension 1937 Fire Pension Total Statement of Net Position Cash and investments $ 945,540 $ 315,084 $ 1,260,624 Other assets 3,821 1,085 4,906 Liabilities (176) (617) (793) Net position 949,185 315,552 1,264,737 Statement of Changes in Net Position Investment income 15,219 7,596 22,815 Contributions 6,228,875 4,482,317 10,711,192 Benefit payments (6,166,971) (4,625,265) (10,792,236) Other deductions (13,254) (15,354) (28,608) Net change in net position $ 63,869 $ (150,706) $ (86,837)

95 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 21 – Reporting Change and Prior Period Adjustment The City made two prior period adjustments for the presentation of the year ended 12/31/2017. First, during the current year, the City adopted GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. As a result, the government-wide statements now include a liability equal to total other postemployment benefits (OPEB) liability. Some of the changes in this total OPEB liability will be recognized immediately as part of the OPEB expense measurement, and part will be deferred and recognized over future years. Refer to Note18 for further details. The effect of these new standards was a decrease of $13,819,558 in net position of governmental activities to record the total OPEB liability at January 1, 2018. In addition, during 2018, the City discovered a misstatement in the presentation of the 2017 financial statements. The City unintentionally double counted a receivable related to the Emergency Medical Services (EMS) Medicaid Supplemental Payment Adjustment. This misstatement resulted in an overstatement of both revenue and accounts receivable on the 2017 CAFR. The effect of these prior period adjustments are shown below:

Governmental Business-type Activities Activities

Net position - December 31, 2017, as previously reported $ 162,225,855 $ 204,389,942 Adjustment for implementation of GASB Statement 75 (13,819,558) - Adjustment to correct 2017 activity for Business-type Activities - Emergency Medical Services Fund - (1,078,551)

Net position - December 31, 2017, as restated $ 148,406,297 $ 203,311,391

Note 22 - Closure and Postclosure Care Cost As of January 1, 2008, the City of South Bend's Biosolids Lagoon #4 site has been closed. The City is required to maintain the one-acre site by monitoring methane and groundwater and maintain the site (mowing, cover inspection, gas collection system inspection, cover repair, ditch maintenance, etc.). The closure and postclosure care costs are reported as operating expenses, as incurred. For the year ending December 31, 2018, the total expenses incurred were $ 8,132.50. The remaining expected liability relating to postclosure costs is estimated at less than $250,000 and due to the minimal nature of these expenditures, is not included in the financial statements

96 City of South Bend, Indiana Notes to Financial Statements December 31, 2018

Note 23 - Tax Abatements The City enters into property tax abatement agreements with local businesses and also for qualifying residential construction under the City’s Municipal Code Chapter 2, Article 6, Tax Abatements, created by Ordinance 7267-83. Under this Article, the City may grant property tax abatements to a business located within or promising to relocate to the City for the purpose of attracting or retaining the business and also for the purpose of encouraging residential construction within economic development target areas. For the fiscal year ended December 31, 2018, the City abated property taxes totaling $1,332,504 under this program. Three properties had property taxes abated that exceeded 10 percent of the total amount. For these properties the taxes abated were $254,704, $233,436, and $183,240.

97 City of South Bend, Indiana Required Supplementary Information 1925 Police Officers' Pension Plan Schedule of Investment Returns Last Five Fiscal Years Years Ended December 31

2018 2017 2016 2015 2014 Annual money-weighted rate of return, net of investment expense 1.75% 0.80% 1.00% 0.80% 0.60%

Information is presented for the years available

98 City of South Bend, Indiana Required Supplementary Information 1925 Police Officers' Pension Plan Schedule of Contributions Last Ten Fiscal Years Years Ended December 31

2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 Actuarially determined $6,161,954 $6,119,059 $6,133,389 $6,073,049 $6,432,800 $6,633,200 $6,986,200 $7,317,800 $6,673,100 $5,995,700 contribution Contributions in relation to the actuarially determined 6,220,658 6,204,179 6,364,236 6,323,645 6,116,195 5,837,216 6,776,614 6,512,842 5,805,597 6,355,442 contribution Contribution (Deficiency) $ 58,704 $ 85,120 $ 230,847 $ 250,596 $ (316,605) $ (795,984) $ (209,586) $ (804,958) $ (867,503) $ 359,742 Excess Covered Employee Payroll $ - $ - $ - $441,200 $441,200 $430,000 $421,800 $542,900 $569,500 $611,000 Contributions as a Percentage of Covered 0.0% 0.0% 0.0% 1433.3% 1386.3% 1357.5% 1606.6% 1199.6% 1019.4% 1040.2% Employee Payroll

Notes to Schedule of Contributions Actuarial valuation information relative to the determination of contributions: Valuation date December 31, 2018 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percent of payroll Remaining amortization period 30 years Asset valuation method Not applicable. Benefits are funded on a pay-as-you-go basis Inflation 2.25% per year Salary increase 2.50% per year Investment rate of return 1.75% per year Retirement age Non-converted - any age with 20 or more years of creditable service; Converted - age 52 with 20 or more years of creditable service and no longer active Mortality RP-2014 Total Data Set Mortality Tables with mortality improvement since 2006 using scale MP-2014 removed and projected on a fully generational basis using the future mortality improvement scale inherent in the mortality projection included in the Social Security Administration's 2014 Trustee Report Other information Cost of living increases of 2.50% per year in retirement for non-converted and 2.00% per year in retirement for converted

99 City of South Bend, Indiana Required Supplementary Information Schedule of Changes in the City Net Pension Liability and Related Ratios 1925 Police Officers' Pension Plan Last Five Fiscal Years

2018 2017 2016 2015 2014 Total Pension Liability Service cost $ 92,916 $ 78,812 $ 164,481 $ 184,104 $ 157,965 Interest 2,337,437 2,653,831 2,344,653 2,415,583 3,721,864 Experience (gains)/losses 2,284,134 995,949 396,259 (2,973,249) - Changes in assumptions (2,697,730) 3,926,922 (5,617,308) (294,402) 12,487,771 Projected benefit payments (6,146,696) (6,045,097) (5,977,290) (6,061,589) (6,122,870) Net Change in Total Pension (4,129,939) 1,610,417 (8,689,205) (6,729,553) 10,244,730 Liability Total Pension Liability ‐ 85,694,021 84,083,604 92,772,809 99,502,362 89,257,632 Beginning of year Total Pension Liability ‐ End $ 81,564,082 $ 85,694,021 $ 84,083,604 $ 92,772,809 $ 99,502,362 of year Plan Fiduciary Net Position Contributions ‐ Other $ - $ 13,544 $ 15,749 $ 62 $ 4,329 Contributions ‐ Non‐employer Entity 6,220,658 6,204,179 5,991,750 6,378,359 6,111,865 Net investment income 15,219 6,557 6,713 4,376 3,759 Administrative expenses (10,054) (13,577) (13,551) (12,462) (10,957) Benefit payments, including refunds (6,161,954) (6,119,245) (6,364,236) (6,323,646) (6,705,815) Net Change in Plan Fiduciary 63,869 91,458 (363,575) 46,689 (596,819) Net Position

Plan Fiduciary Net Position ‐ Beginning of year 885,316 793,858 1,157,433 1,110,743 1,707,562 Plan Fiduciary Net Position ‐ End of year $ 949,185 $ 885,316 $ 793,858 $ 1,157,432 $ 1,110,743 City's Net Pension Liability ‐ Ending $ 80,614,897 $ 84,808,705 $ 83,289,746 $ 91,615,377 $ 98,391,619 Plan Fiduciary Net Position as a 1.16% 1.03% 0.94% 1.25% 1.12% % of Total Pension Liability Covered Employee Payroll $ - $ - $ - $441,200 $441,200 City's Net Pension Liability as a % of Covered Employee Payroll 0% 0% 0% 20765% 22301%

Information is presented for the years available

100 City of South Bend, Indiana Required Supplementary Information Schedule of Pension Investment Returns 1937 Firefighters' Pension Plan Last Five Fiscal Years Years Ended December 31

2018 2017 2016 2015 2014 Annual money-weighted rate of return, net of investment expense 1.75% 0.80% 1.00% 0.80% 0.60%

Information is presented for the years available

101 City of South Bend, Indiana Required Supplementary Information 1937 Firefighters' Pension Plan Schedule of City Contributions Last Ten Fiscal Years Years Ended December 31

2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 Actuarially determined $4,618,617 $4,727,592 $5,152,192 $4,977,042 $5,436,400 $5,550,900 $5,787,300 $6,399,700 $5,811,400 $5,258,600 contribution Contributions in relation to the actuarially determined 4,472,469 4,920,712 5,165,758 5,197,158 5,130,581 5,051,319 5,208,570 5,503,742 5,172,146 5,416,358 contribution Contribution (Deficiency) $ (146,148) $ 193,120 $ 13,566 $ 220,116 $ (305,819) $ (499,581) $ (578,730) $ (895,958) $ (639,254) $ 157,758 Excess Covered Employee $ - $ - $ - $328,600 $328,600 $319,300 $365,500 $397,100 $429,500 $474,450 Payroll Contributions as a Percentage of Covered 0.00% 0.00% 0.00% 1581.61% 1561.30% 1582.00% 1425.10% 1386.00% 1204.20% 1141.60% Employee Payroll

Notes to Schedule of Contributions Actuarial valuation information relative to the determination of contributions: Valuation date December 31, 2018 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percent of payroll Remaining amortization period30 years Asset valuation method Not applicable. Benefits are funded on a pay-as-you-go basis Inflation 2.25% per year Salary increase 2.50% per year Investment rate of return 1.75% per year Retirement age Non-converted - any age with 20 or more years of creditable service; Converted - age 52 with 20 or more years of creditable service and no longer active Mortality RP-2014 Total Data Set Mortality Tables with mortality improvement since 2006 using scale MP-2014 removedand projected on a fully generational basis using the future mortality improvement scale inherent in the mortality projection included in the Social Security Administration's 2014 Trustee Report Other information Cost of living increases of 2.50% per year in retirement for non-converted and 2.00% per year in retirement for converted

102 City of South Bend, Indiana Required Supplementary Information Schedule of Changes in the City Net Pension Liability and Related Ratios 1937 Firefighters' Pension Plan Last Five Fiscal Years

2018 2017 2016 2015 2014 Total Pension Liability Service cost $ 98,529 $ 81,717 $ 163,162 $ 155,487 $ 114,297 Interest 1,815,032 2,124,050 1,940,826 2,020,796 3,155,669 Experience (gains)/losses (482,208) (1,611,010) (262,337) (2,816,692) - Changes in assumptions (2,105,211) 3,179,702 (4,645,609) (245,887) 9,620,657 Projected benefit payments (4,572,612) (4,727,592) (4,980,991) (5,094,762) (5,206,870) Net Change in Total Pension Liability (5,246,470) (953,133) (7,784,949) (5,981,058) 7,683,753 Total Pension Liability ‐ Beginning 68,671,131 69,624,264 77,409,213 83,390,271 75,706,518 of year Total Pension Liability ‐ End of year $ 63,424,661 $ 68,671,131 $ 69,624,264 $ 77,409,213 $ 83,390,271 Plan Fiduciary Net Position Contributions ‐ Other $ - $ 4,251 $ 6,279 $ 2,667 $ 1,484 Contributions ‐ Non‐employer Entity 4,472,469 4,920,712 4,866,271 5,039,025 5,129,098 Net investment income 7,596 3,352 2,852 2,675 1,963 Administrative expenses (12,154) (14,771) (14,485) (14,255) (10,920) Benefit payments, including refunds (4,618,617) (4,614,480) (5,165,758) (5,197,159) (5,407,429) Net Change in Plan Fiduciary Net Position (150,706) 299,064 (304,841) (167,047) (285,804) Plan Fiduciary Net Position ‐ Beginning of year 466,258 167,194 472,035 639,081 924,885 Plan Fiduciary Net Position ‐ End of year $ 315,552 $ 466,258 $ 167,194 $ 472,034 $ 639,081 City's Net Pension Liability ‐ Ending $ 63,109,109 $ 68,204,873 $ 69,457,070 $ 76,937,179 $ 82,751,190 Plan Fiduciary Net Position as a % 0.50% 0.68% 0.24% 0.61% 0.77% of Total Pension Liability Covered Employee Payroll $ - $ - $ - $328,600 $328,600 City's Net Pension Liability as a % 0% 0% 0% 23414% 25183% of Covered Employee Payroll

Information is presented for the years available

103 City of South Bend, Indiana Required Supplemental Information Schedule of City Contributions Public Employees' Retirement Fund Last Four Fiscal Years Years Ended June 30

2018 2017 2016 2015

Actuarially determined contribution $ 3,302,670 $ 5,307,308 $ 4,526,527 $ 3,650,212 Contributions in relation to the actuarially determined contributions 3,309,216 3,219,677 2,933,996 2,982,234

Contribution Deficiency $ (6,546) $ 2,087,631 $ 1,592,531 $ 667,978

Covered Employee Payroll $ 29,759,859 $ 28,768,543 $ 26,237,016 $ 26,681,229 Contributions as a Percentage of Covered Employee Payroll 11.1% 11.2% 11.2% 11.2%

Information is presented for the years available

Notes to Schedule of Contributions Actuarial valuation information relative to the determination of contributions: Valuation date June 30, 2018 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percent of payroll Remaining amortization period 25 years

Actuarial Value of Assets is equal to a five-year smoothing of gains and losses on the Market Value of Assets subject to a Asset valuation method 20% corridor Inflation 2.25% per year Salary increase 2.50% to 4.25% per year Investment rate of return 6.75% per year Normal retirement ages are age 65 and 10 years (eight years for certain elected officials) of creditable service, age 60 and 15 years of creditable service, and age 55 if age and creditable service total at least 85 with early retirement at 50 with 15 Retirement age years of service RP-2014 (with MP-2014 improvement removed) Total Data Set Mortality Table, with future mortality improvement projected generationally using future mortality improvement inherent in the Social Security Mortality Administration's 2014 Trustee report. In lieu of a COLA on January 1, 2019, members in pay were provided a 13th check on October 1, 2018. It is assumed a 13th Other information check would continue for the 2020 and 2021 fiscal years.

104 City of South Bend, Indiana Required Supplemental Information Schedule of the City's Proportionate Share of the Net Pension Liability Public Employees' Retirement Fund Last Five Fiscal Years Years Ended June 30

2018 2017 2016 2015 2014

City's proportion of the net pension liability (asset) 0.58323% 0.57988% 0.54700% 0.55700% 0.56300% City's proportionate share of the net pension liability (asset) $ 19,812,587 $ 25,871,598 $ 24,845,715 $ 22,687,694 $ 14,807,363

City's covered employee payroll $ 29,759,859 $ 28,768,543 $ 26,237,016 $ 26,691,229 $ 27,509,916 City's Proportionate Share of the Net pension Liability (Asset) as a Percentage of its Covered Employee Payroll 66.57% 89.93% 94.70% 85.00% 53.83% Plan Fiduciary Net Position as a Percentage of Total Pension Liability 78.9% 76.6% 75.3% 77.3% 84.3%

Information is presented for the years available

105 City of South Bend, Indiana Required Supplemental Information Schedule of City Contributions 1977 Police Officers' Pension and Disability Fund Last Four Fiscal Years Years Ended June 30

2018 2017 2016 2015

Actuarially determined contribution $ 1,702,380 $ 2,143,623 $ 2,029,937 $ 709,017 Contributions in relation to the actuarially determined contribution 2,433,268 2,600,280 2,673,614 2,625,418

Contribution Excess$ 730,888 $ 456,657 $ 643,677 $ 1,916,401

City's Covered Employee Payroll $ 13,896,923 $ 13,968,031 $ 13,571,531 $ 13,327,077 Contributions as a Percentage of Covered Employee Payroll 17.5% 18.6% 19.7% 19.7%

Information is presented for the years available

Notes to Schedule of City Contributions Actuarial valuation information relative to the determination of contributions: Valuation date June 30, 2018 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percent of payroll Remaining amortization period 30 years Actuarial Value of Assets is equal to a five-year smoothing of gains and losses on the Market Asset valuation method Value of Assets subject to a 20% corridor Inflation 2.25% per year Salary increase 2.50% per year Investment rate of return 6.75% per year Retirement age Normal retirement is age 52 with 20 years of service; early retirement is age 50 with 20 years of service (reduced benefit) RP-2014 (with MP-2014 improvement removed) Blue Collar mortality tables, with future mortality improvement projected generationally using future mortality improvement inherent in the Mortality Social Security Administration's 2014 Trustee report Other information Cost of living increases of 2.0% per year

106 City of South Bend, Indiana Required Supplemental Information Schedule of the City's Proportionate Share of the Net Pension Liability 1977 Police Officers' Pension and Disability Fund Last Five Fiscal Years Years Ended June 30

2018 2017 2016 2015 2014

City's proportion of the net pension liability (asset) 1.6501% 1.72294% 1.75600% 1.78700% 1.82900% City's proportionate share of the net pension liability (asset) $ (1,450,622) $ (265,770) $ 1,559,932 $ (2,640,039) $ (932,236) City's covered employee payroll $ 13,896,923 $ 13,968,031 $ 13,571,531 $ 13,327,077 $ 12,981,067 City's Proprotionate Share of the Net pension Liability (Asset) as a Percentage of its Covered Employee Payroll -10.44% -1.90% 11.49% (19.8)% (7.2)% Plan Fiduciary Net Position as a Percentage of Total Pension Liability 101.50% 100.3% 98.2% 103.2% 101.1%

Information is presented for the years available

107 City of South Bend, Indiana Required Supplemental Information 1977 Firefighters' Pension and Disability Fund Schedule of City Contributions Last Four Fiscal Years Years Ended June 30

2018 2017 2016 2015

Actuarially determined contribution $ 1,867,174 $ 2,232,482 $ 2,053,907 $ 743,238 Contributions in relation to the actuarially determined contributions 2,634,358 2,677,560 2,673,917 2,666,116

Contribution Deficiency (Excess)$ (767,184) $ (445,078) $ (620,010) $ (1,922,878)

Covered Employee Payroll 15,052,876 14,398,217 $ 13,588,032 $ 13,533,745 Contributions as a Percentage of Covered Employee Payroll 17.50% 18.60% 19.68% 19.70%

Information is presented for the years available

Notes to Schedule of City Contributions Actuarial valuation information relative to the determination of contributions: Valuation date June 30, 2018 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percent of payroll Remaining amortization period 30 years Actuarial Value of Assets is equal to a five-year smoothing of gains and losses on the Asset valuation method Market Value of Assets subject to a 20% corridor Inflation 2.25% per year Salary increase 2.50% per year Investment rate of return 6.75% per year Retirement age Normal retirement is age 52 with 20 years of service; early retirement is age 50 with 20 years of service (reduced benefit) RP-2014 (with MP-2014 improvement removed) Blue Collar mortality tables, with future mortality improvement projected generationally using future mortality improvement Mortality inherent in the Social Security Administration's 2014 Trustee report Other information Cost of living increases of 2.0% per year

108 City of South Bend, Indiana Required Supplemental Information Schedule of the City's Proportionate Share of the Net Pension Liability 1977 Firefighters' Pension and Disability Fund Last Five Fiscal Years Years Ended June 30

2018 2017 2016 2015 2014

City's proportion of the net pension liability (asset) 1.78736% 1.77600% 1.75800% 1.81500% 1.79500% City's proportionate share of the net pension liability (asset) $ (1,571,289) $ (273,955) $ 1,561,833 $ (2,680,987) $ (915,265) City's covered employee payroll $ 15,052,876 $ 14,398,217 $ 13,588,032 $ 13,533,745 $ 12,744,754 City's Proprotionate Share of the Net pension Liability (Asset) as a Percentage of its Covered Employee Payroll -10.44% -1.90% 11.49% -19.81% -7.18% Plan Fiduciary Net Position as a Percentage of Total Pension Liability 101.50% 100.3% 98.2% 103.2% 101.1%

Information is presented for the years available

109 City of South Bend, Indiana Schedules of Required Supplementary Information Schedule of Changes in the City's Total OPEB Liability and Related Ratios Year Ended December 31, 2018

Total OPEB liability

Service Cost $ 1,489,465 Interest 1,026,964 Difference between expected and actual experience 1,503,991 Changes of assumptions or other inputs (8,795,897) Benefit payments (758,730) Net change in total OPEB liability (5,534,207)

Total OPEB Liability - beginning 28,740,294

Total OPEB Liability - ending $ 23,206,087

Plan fiduciary net position - ending$ -

Net OPEB Liability - ending$ 23,206,087 Plan fiduciary net opsition as % of total OPEB liability 0%

Covered employee payroll$ 58,876,762 Net OPEB liability as a % fo covered payroll 39.4%

Information is presented for the years available

Notes to Schedule: This is the first year the total OPEB liability was calculated based on GASB 75

110 City of South Bend, Indiana Required Supplementary Information Budgetary Comparison Schedules General Fund Year Ended December 31, 2018

General Fund Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - Property$ 39,246,940 $ 40,719,333 $ 40,719,333 $ - Licenses and permits 230,510 243,194 252,481 9,287 Intergovernmental 4,373,614 4,688,955 4,544,341 (144,614) Charges for services 933,677 888,058 774,120 (113,938) Fines and forfeitures 8,920 15,120 16,079 959 Investment income 240,000 410,000 476,266 66,266 Other 8,227,027 8,973,781 8,563,828 (409,953) Total revenues 53,260,688 55,938,441 55,346,448 (591,993)

Expenditures: Current: General government: Mayor: Personnel services 736,276 722,045 691,853 30,192 Supplies 700 1,802 830 972 Other services and charges 170,864 184,295 178,631 5,664 City Clerk: Personnel services 368,354 374,014 353,280 20,734 Supplies 7,800 13,507 4,398 9,109 Other services and charges 167,993 186,032 159,612 26,420 Common Council: Personnel services 366,291 366,291 313,937 52,354 Supplies 6,375 16,707 10,068 6,639 Other services and charges 242,303 287,015 247,332 39,683 WNIT Contract: Other services and charges 43,000 43,000 43,000 - Administration/Finance: Personnel services 2,280,450 2,280,450 2,065,101 215,349 Supplies 23,500 23,530 13,679 9,851 Other services and charges 315,846 335,346 315,405 19,941 Legal Department: Personnel services 1,082,003 1,082,003 980,943 101,060 Supplies 3,450 3,626 2,962 664 Other services and charges 115,344 115,344 104,140 11,204 Human Rights: Personnel services 311,040 311,040 241,092 69,948 Supplies 1,037 1,037 898 139 Other services and charges 135,023 135,056 125,821 9,235 Total General Government 6,377,649 6,482,140 5,852,982 629,158

111 City of South Bend, Indiana Required Supplementary Information Budgetary Comparison Schedules General Fund (Continued) Year Ended December 31, 2018

General Fund Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Public Safety: Police Department: Personnel services$ 23,872,149 $ 24,141,649 $ 24,069,590 $ 72,059 Supplies 295,731 971,557 715,253 256,304 Other services and charges 4,655,450 4,765,508 4,455,495 310,013 Capital outlay - 17,028 - 17,028 Fire Department: Personnel services 18,065,312 18,150,662 18,134,719 15,943 Supplies 461,150 516,512 405,751 110,761 Other services and charges 2,741,928 3,076,169 2,976,134 100,035 Total Public Safety 50,091,720 51,639,085 50,756,942 882,143

Highways and Streets: Engineering: Personnel services 971,589 936,784 898,952 37,832 Supplies 20,850 28,630 13,530 15,100 Other services and charges 598,066 784,670 560,223 224,447 AmeriCorps Program: Personnel services - 85,175 16,677 68,498 Supplies - 72,420 53 72,367 Other services and charges - 208,593 638 207,955 Total highways and streets 1,590,505 2,116,272 1,490,073 626,199

Culture and recreation: Morris Performing Arts Center: Personnel services 583,005 693,005 551,102 141,903 Supplies 4,200 29,796 20,327 9,469 Other services and charges 731,313 597,990 378,059 219,931 Palais Royale Ballroom: Personnel services 157,818 235,818 204,328 31,490 Supplies 1,900 23,014 13,006 10,008 Other services and charges 364,646 267,596 171,539 96,057 Capital outlay 15,000 15,000 15,000 - Total culture and recreation 1,857,882 1,862,219 1,353,361 508,858

Total expenditures 59,917,756 62,099,716 59,453,358 2,646,358

112 City of South Bend, Indiana Required Supplementary Information Budgetary Comparison Schedules General Fund (Continued) Year Ended December 31, 2018

General Fund Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Other financing sources (uses): Proceeds from sale of capital assets $ - $ 39,261 $ 39,261 $ - Transfers in 6,746,201 6,760,910 6,760,910 - Transfers out - (500) (500) -

Net change in fund balances 89,133 638,396 2,692,761 2,054,365

Fund balances - beginning 36,417,969 36,417,969 36,417,969 -

Fund balances - ending $ 36,507,102 $ 37,056,365 $ 39,110,730 $ 2,054,365

113 City of South Bend, Indiana Required Supplementary Information Budgetary Comparison Schedule - Major Special Revenue Funds

Parks and Recreation Year Ended December 31, 2018

Parks and Recreation Fund Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - property$ 8,943,000 $ 9,591,899 $ 9,591,899 $ - Intergovernmental 2,720,000 2,892,316 1,588,416 (1,303,900) Charges for services 2,903,820 2,354,871 1,715,313 (639,558) Investment income 24,996 87,000 82,586 (4,414) Other 321,100 421,816 399,033 (22,783)

Total revenues 14,912,916 15,347,902 13,377,247 (1,970,655)

Expenditures: Current: Culture and recreation: Personnel services 8,352,126 8,010,426 7,670,708 339,718 Supplies 1,224,056 1,366,572 998,555 368,017 Other services and charges 4,919,484 4,975,213 4,135,158 840,055 Capital outlay 1,600,000 1,825,000 842,582 982,418

Total expenditures 16,095,666 16,177,211 13,647,003 2,530,208

Other financing sources (uses): Proceeds from sale of capital assets - 20,194 20,194 - Transfers in 1,287,600 1,287,600 2,345,846 1,058,246 Transfers out (104,850) (104,850) - 104,850

Net change in fund balances - 373,635 2,096,284 1,722,649

Fund balances - beginning 6,210,755 6,210,755 6,210,755 -

Fund balances - ending $ 6,210,755 $ 6,584,390 $ 8,307,039 $ 1,722,649

114 City of South Bend, Indiana Required Supplementary Information Budgetary Comparison Schedule - Major Special Revenue Funds (Continued) Public Safety LOIT Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - County option income tax$ 7,629,539 $ 7,851,541 $ 8,487,336 $ 635,795 Investment income 6,000 21,900 22,175 275

Total revenues 7,635,539 7,873,441 8,509,511 636,070

Expenditures: Current: Public Safey: Personnel services 7,622,970 7,622,970 7,538,724 84,246

Total expenditures 7,622,970 7,622,970 7,538,724 84,246

Net change in fund balances 12,569 250,471 970,787 720,316

Fund balances - Beginning 988,905 988,905 988,905 -

Fund balances - Ending $ 1,001,474 $ 1,239,376 $ 1,959,692 $ 720,316

115 City of South Bend, Indiana Required Supplementary Information Budgetary Comparison Schedule - Major Special Revenue Funds (Continued) COIT Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - county option income tax$ 10,906,293 $ 11,430,876 $ 12,339,734 $ 908,858 Investment income 95,000 180,000 182,755 2,755 Other 610,131 657,446 657,457 11

Total revenues 11,611,424 12,268,322 13,179,946 911,624

Expenditures: Current: General Government: Supplies 806,390 826,532 683,344 143,188 Other services and charges 7,587,225 9,003,696 6,711,128 2,292,568 Capital outlay 295,000 433,845 127,132 306,713

Total expenditures 8,688,615 10,264,073 7,521,604 2,742,469

Other Financing Sources (Uses): Transfers in - 324,171 324,159 (12) Transfers out (2,787,600) (2,787,600) (2,787,600) -

Net change in fund balances 135,209 (459,180) 3,194,901 3,654,081

Fund balances - Beginning 8,614,576 8,614,576 8,614,576 -

Fund balances - Ending $ 8,749,785 $ 8,155,396 $ 11,809,477 $ 3,654,081

116 City of South Bend, Indiana Required Supplementary Information Budgetary Comparison Schedule - Major Special Revenue Funds (Continued) EDIT Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - county economic development income tax$ 10,720,965 $ 10,992,076 $ 11,885,489 $ 893,413 Charges for services 150,000 150,000 - (150,000) Fines and forfeitures 354,660 354,660 354,660 - Investment income 60,000 250,000 260,688 10,688 Other - 2,109 2,109 -

Total revenues 11,285,625 11,748,845 12,502,946 754,101

Expenditures: Current: General government: Supplies - 83 - 83 Other services and charges 5,654,029 6,198,808 4,097,101 2,101,707 Capital outlay 190,000 190,000 49,830 140,170

Total expenditures 5,844,029 6,388,891 4,146,931 2,241,960

Other financing sources (uses): Proceeds from sale of capital assets - 596,073 596,073 - Transfers out (5,441,596) (6,609,373) (6,572,551) 36,822

Net change in fund balances - (653,346) 2,379,537 3,032,883

Fund balances - beginning 12,770,240 12,770,240 12,770,240 -

Fund balances - ending $ 12,770,240 $ 12,116,894 $ 15,149,777 $ 3,032,883

117 City of South Bend, Indiana Required Supplementary Information Budgetary Comparison Schedule - Major Special Revenue Funds (Continued) Rainy Day Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 80,000 $ 185,000 $ 183,841 $ (1,159)

Total revenues 80,000 185,000 183,841 (1,159)

Net change in fund balances 80,000 185,000 183,841 (1,159)

Fund balances - beginning 10,294,137 10,294,137 10,294,137 -

Fund balances - ending $ 10,374,137 $ 10,479,137 $ 10,477,978 $ (1,159)

118 City of South Bend, Indiana Required Supplementary Information Budget/GAAP Reconciliation General Fund and Major Special Revenue Funds For the Year Ended December 31, 2018

The major differences between budgetary (Non-GAAP) basis and GAAP basis are as follows:

a. Revenues are recorded when received in cash (budgetary) as opposed to susceptible to accrual (GAAP).

b. Expenditures are recorded when paid in cash (budgetary) as opposed to when the liability is incurred (GAAP).

c. Encumbrances are recorded as expenditures for budgetary purposes when purchase orders are issued.

Adjustments necessary to convert the results of operations at the end of the year on a budgetary basis to a GAAP basis are as follows:

Parks and Public Safety General Recreation LOIT COIT EDIT Rainy Day

Net change in fund balances (budgetary basis)$ 2,692,761 $ 2,096,284 $ 970,787 $ 3,194,901 $ 2,379,537 $ 183,841

Adjustments: To adjust revenues for accruals 10,691,807 140,279 881 1,759,666 204,729 3,480 To adjust expenditures for accruals (11,041,942) (2,393,491) (14,846) (4,430,160) (2,147,125) - To adjust expenditures for encumbrances 820,914 1,400,311 - 1,812,159 1,942,214 -

Net change in fund balances (GAAP basis)$ 3,163,540 $ 1,243,383 $ 956,822 $ 2,336,566 $ 2,379,355 $ 187,321

119 City of South Bend, Indiana Notes to Required Supplemental Information

Note 1 - Budgets and Budgetary Accounting The City follows these procedures in establishing the budgetary data reflected in the budgetary comparison schedules: A. After conferring with the Common Council President and several department heads, the City Controller submits to the Common Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. B. Prior to adoption, the City advertises the budget and the Common Council holds public hearings to obtain taxpayer comments. The Common Council may reduce, but not increase, the budget from the advertised amounts. C. No later than November 1 of each year, the budget for the next year is approved by the Common Council through the passage of an ordinance. D. Copies of the budget ordinance and advertisements for funds for which property taxes are levied or highway use taxes are received are sent to the Indiana Department of Local Government Finance for their review and approval. The budget becomes legally enacted after the City Controller receives approval from the Indiana Department of Local Government Finance. This approval is required by Indiana statute and ad valorem property tax rates are to be set by February 15 of the year budgeted. The budget ordinance as approved by the Indiana Department of Local Government Finance becomes the City's expenditures budget. The City's maximum tax levy is restricted by Indiana law, with certain adjustments and exceptions. If the advertised budget, for funds for which property taxes are levied or for which highway use taxes are received, exceeds the spending and tax limits of the state control laws, an excess levy can be granted by the Indiana Department of Local Government Finance, upon appeal by the City. E. The legal level of budgetary control (the level at which expenditures may not exceed appropriations without the governing body’s approval) is by object classification for all funds except for the General Fund, which is by object classification within each department. The City’s management cannot transfer budgeted appropriations between object classifications of a budget without approval of the Common Council. Any revisions that alter the total appropriations for any fund or any department of the General Fund must be approved by the Common Council and, in some instances, by the Indiana Department of Local Government Finance. Formal budgetary integration is required by state statute and is employed as a management control method. F. Formal budgetary integration is required by State statute and is employed as a management control device. An annual budget was legally adopted for the following funds: Major funds: • General Fund • Special revenue funds - parks and recreation, public safety local option income tax (LOIT), county option income tax (COIT), economic development income tax (EDIT), rainy day • Capital projects fund - River West TIF

120 City of South Bend, Indiana Notes to Required Supplemental Information (Continued)

Nonmajor governmental funds: • Special revenue funds - Motor Vehicle Highway, Recreation Nonreverting, Studebaker Oliver Revitalization Grants, Economic Development State Grants, DCI Operating, Community Investment Grants, Police State Seizure, Juvenile Positive Assistance, Unsafe Building, Law Enforcement Continuing Education, Landlord Registration, Loss Recovery, Local Road and Street, LOIT 2016 Special Distribution, Human Rights Federal Grant, Local Road and Bridge Grant, Morris and Palais Marketing, Morris PAC Self Promotion, Police Block Grants, Economic Development Commission, Hazmat, Indiana River Rescue, COPS Block Grant II, Regional Police Academy, COPS MORE Grant, Federal Drug Enforcement, Gift, Urban Development Action Grant, Leaf Collection and Removal, Police K 9 Unit, Industrial Revolving • Debt service fund - College Football Hall of Fame Debt Service, Redevelopment Bond Airport Taxable, Coveleski Bond Debt Service Reserve, Redevelopment Bond Palais Royale, South Bend Building Corporation Debt Service, Smart Streets Debt Service, 2015 Parks Bond Debt Service, Century Center Energy Conservation Debt Service, Redevelopment Authority Debt Service, Eddy St. Commons Debt Service, 2017 Parks Bond Debt Service, 2018 TIF Park Bonds Debt Service Reserve • Capital projects funds - Professional Sports Development, Coveleski Stadium Capital, Park Nonreverting Capital, Cumulative Capital Development, Cumulative Capital Improvement, Morris Performing Arts Center Capital, Redevelopment Retail Area (Leighton Plaza), TIF West Washington, Redevelopment General, TIF No. 1 Southside Development, Football Hall of Fame Capital, Major Moves, TIF River East Development, TIF Douglas Road, TIF River East Residential, Certified Technology Park, Palais Royale Historic Preservation, Airport Urban Enterprise Zone, Vehicle Equipment Leasing, Smart Streets Bond Capital Projects, 2015 Parks Bond Capital Projects, 2017 Parks Bond Capital Projects, Eddy St. Commons Capital, 2018 Fire Station #9 Capital, 2018 TIF Park Bond Capital

G. The City's budgetary process is based upon cash outflows, which is a non-GAAP basis. Appropriations lapse with the expiration of the budgetary period unless encumbered by a purchase order or contract. Encumbered appropriations are carried over and added to the subsequent year's budget. H. Budgeted amounts are as originally adopted, or as amended by the Common Council and approved by the Indiana Department of Local Government Finance in the regular legal manner. The net effect of individual amendments to the budget increased the original appropriations by $15,896,676 in 2018 for the funds listed above. I. Expenditures did not exceed appropriations for any funds or any departments within the General Fund, the Parks and Recreation Fund, the Public Safety LOIT Fund, the COIT Fund, the EDIT Fund, the Rainy Day Fund, or any other major or nonmajor governmental fund which required legally approved budgets except for the Redevelopment Bond – Airport Taxable Fund and the South Bend Building Corporation Debt Service Fund. In 2018, these two funds incurred paying agent fees higher than anticipated.

121 Other Supplemental Information

122 City of South Bend, Indiana Other Supplemental Information Nonmajor Governmental Funds Fund Descriptions

Nonmajor Governmental Funds Descriptions

Special Revenue Funds

Motor Vehicle Highway To account for street construction and the operations of the street maintenance department. Financing is provided by state motor vehicle highway distributions.

Recreation Non-Reverting To account for fees and related expenses from park department activities.

Studebaker/Oliver Revitalization Grants To account for expenditures related to the Studebaker and Oliver revitalization projects. Financing is provided by federal and state grants and loans from other organizations.

Economic Development State Grants To account for expenditures related to projects promoting economic development. Financing is provided by state grants and loan payments. Expenditures include grants and related expenses.

DCI Operating To account for the operating expenditures related to the South Bend Department of Community Investment. Financing will be provided by revenues received from charges for services, other revenue sources, and from fund transfers.

Community Investment Grants To account for revenues received from the U.S. Department of Housing and Urban Development related to community improvement projects.

Police State Seizure To account for law enforcement expenditures financed by the authorized state or local agencies' sale of confiscated property.

Juvenile Positive Assistance To account for monies received from penalties paid for curfew violations. Expenditures include Drug Abuse Resistance Education and Juvenile Aid Bureau.

Unsafe Building To account for expenditures related to board ups and other services related to unsafe buildings. Financing will be provided by fines and fees related to the Unsafe Building law.

123 City of South Bend, Indiana Other Supplemental Information Nonmajor Governmental Funds Fund Descriptions (Continued)

Law Enforcement Continuing Education To account for police fees collected to finance police officers' continuing education, training, and supplies and equipment.

Landlord Registration To account for costs related to the South Bend Landlord Registration program. Financing is provided by a registration fee paid by landlords.

Loss Recovery Fund To account for compensatory or exemplary damage payments from third parties arising from loss or damage to City tangible or intangible property.

Local Road and Street To account for operation and maintenance of local and arterial road and street systems. Financing is provided by state gasoline tax distributions.

LOIT 2016 Special Distribution To account for a special distribution from the State that can only be spent on road projects.

Human Rights Federal To account for expenditures to prevent discrimination and to promote human rights. Financing is provided by federal grants.

Local Road and Bridge Matching Grant

To account for Community Crossing state grants and matching revenues which provide financing for eligible projects.

Morris and Palais Marketing To account for marketing and promotion expenditures financed by sponsorship solicitations and donations.

Morris PAC Self-Promoted Events To account for revenue and expenditures related to events and activities that the Morris Performing Art Center (PAC) self-promotes or self-sponsors.

Police Block Grants To account for federal grants which provide financing for police activities.

124 City of South Bend, Indiana Other Supplemental Information Nonmajor Governmental Funds Fund Descriptions (Continued)

Economic Development Commission To account for administrative expenditures of the Economic Development Commission. Financing is provided by fees from businesses applying for Economic Development Revenue Bonds. Hazmat To account for monies generated by the South Bend Fire Department's response to hazardous materials incidents. Funds are used to purchase, repair, or replace hazmat equipment, or for training and supplies.

Indiana River Rescue To account for expenditures related to river rescue training. Financing is provided by registration fees.

COPS Block Grant II To account for federal grants which provide financing for police activities.

Regional Police Academy To account for revenues (tuition) and expenditures (seminars, travel, lectures, and career days) related to the advancement of present and future police officers.

COPS MORE Grant To account for a COPS MORE grant which provides financing for police activities.

Federal Drug Enforcement To account for expenditures for drug enforcement. Financing is provided by distributions from the authorized federal agencies' confiscated property sale.

Gift To account for donations, gifts, or bequeaths for purposes designated by the donor.

Urban Development Action Grant To account for economic development expenditures which are financed by federal grants and loan repayments.

Leaf Collection and Removal To account for the expenditures of a program to remove leaves from the City each fall. Financing is provided by a monthly service fee charged to all City residents.

Police K-9 Unit To account for donations for development and maintenance of the K-9 unit.

125 City of South Bend, Indiana Other Supplemental Information Nonmajor Governmental Funds Fund Descriptions (Continued)

Industrial Revolving To account for the revenue and expenditures of providing special loans to qualifying local firms. Financing was originally provided by a $5,000,000 Economic Adjustment Assistance Grant from the U.S. Department of Commerce.

Debt Service Funds

College Football Hall of Fame Debt Service To accumulate monies for the payment of Redevelopment Authority bonds issued to refinance bonds issued for construction of the College Football Hall of Fame. Financing is to be provided by an annual property tax levy.

Redevelopment Bond - Airport Taxable To accumulate monies as a reserve for the payment of Redevelopment Authority bonds for the airport taxable project.

Coveleski Bond Debt Service Reserve To accumulate monies as a reserve for the payment of the Coveleski Stadium recovery zone economic development bonds. Financing for debt payments is to be provided by professional sports and convention development area taxes (PSCDA) and county option income tax revenues if PSCDA revenues are insufficient.

Redevelopment Bond - Palais Royale To accumulate monies as a reserve for the payment of Redevelopment Authority bonds for the Palais Royale project.

South Bend Building Corporation Debt Service To account for debt retirement of the Building Corporation's Mortgage Bonds. Funding is provided by transfers from other City funds.

Smart Streets Debt Service To account for debt retirement of 2015 Redevelopment Authority bonds for smart streets/"two- way streets" conversion. Funding is provided by transfers from other City funds.

2015 Parks Bonds Debt Service To account for debt retirement of the 2015 Building Corporation/EDIT bond for park improvements. Funding is provided by transfers from other City funds.

Century Center Energy Conservation Debt Service To account for debt retirement of a 2015 qualified energy conservation bond for improvements at Century Center. Funding is provided by hotel/motel tax revenue, interest rebates, and transfers from other City funds.

126 City of South Bend, Indiana Other Supplemental Information Nonmajor Governmental Funds Fund Descriptions (Continued)

Redevelopment Authority Debt Service To accumulate monies for the payment of Redevelopment Authority bonds issued to refinance bonds issued for construction of Century Center improvements and bonds issued to refinance bonds issued for the Eddy Street Commons project. Eddy St. Commons Debt Service To account for the Eddy Street Commons phase II project debt retirement. Financing is provided by bond proceeds set aside for debt service and by transfers from the Tax Incremental Financing (TIF) River East Development fund.

2017 Parks Bonds Debt Service To account for the South Bend Park District Bonds, Series 2017A-K debt retirement. Financing for debt payments is to be provided by an annual property tax levy.

Fire Station No. 9 Debt Service To account for the South Bend General Obligation Bonds Fire Station No. 9 debt retirement. Financing for debt payments is to be provided by annual transfers from the City’s emergency medical services (EMS) fund. If EMS revenues are insufficient, then financing of debt payments will be provided by local income tax revenues, tax increment finance revenues or an annual property tax levy.

2018 TIF Park Bonds Debt Service Reserve To accumulate monies as a reserve for the Redevelopment District Bonds, Series 2018 debt. Financing is provided by bond proceeds set aside for debt service.

Capital Project Funds

Professional Sports Development To account for Professional Sports Development Tax revenues dedicated towards debt service and improvements at Four Winds Field baseball stadium (formerly known as Coveleski Stadium).

Coveleski Stadium Capital To account for expenditures related to the maintenance and improvement of the baseball stadium. Financing is provided by a rental paid by the semi-pro baseball team.

Park Non-Reverting Capital To account for specific revenues used to finance capital improvements at the City parks.

Cumulative Capital Development To account for expenditures relating to the purchase or lease of capital improvements in the City. Financing is provided by a specific property tax levy.

127 City of South Bend, Indiana Other Supplemental Information Nonmajor Governmental Funds Fund Descriptions (Continued)

Cumulative Capital Improvement To account for state cigarette tax distributions used for improvement projects.

Morris Performing Arts Center Capital

To account for improvements and upgrades to the Morris Performing Arts Center.

Redevelopment Retail Area (Leighton Plaza) To account for revenue from the rental of property in downtown South Bend to be used for Leighton Plaza maintenance costs.

Tax Incremental Financing (TIF) - West Washington To account for expenditures for public improvement projects in the West Washington Economic Development Area. Financing is provided by property tax proceeds in excess of those attributable to the assessed value of the property in the district before redevelopment.

Redevelopment General To account for eligible redevelopment activities in the Studebaker Corridor financed by proceeds from land sales or leases.

Tax Incremental Financing (TIF) No. 1 - Southside Development To account for expenditures for improvements in the Southside Development Tax incremental district No. 1. Financing is provided by property tax proceeds in excess of those attributable to the assessed valuation of the property in the district before redevelopment.

Football Hall of Fame Capital To account for capital expenditures for the College Football Hall of Fame. Financing was provided by a transfer from the City's Professional Sports Development Fund. This fund also accounts for the advance from the General Fund which may be repaid from future operating surpluses.

Major Moves To account for state distributions used for road construction and other uses authorized by Indiana statute.

Tax Incremental Financing (TIF) - River East Development To account for expenditures for improvements in the northeast development tax incremental district. Financing is provided by property tax proceeds in excess of those attributable to the assessed valuation of the property in the district before redevelopment. During TIF consolidation in 2015, this fund was renamed. It was formerly known as the TIF Northeast Development Fund.

128 City of South Bend, Indiana Other Supplemental Information Nonmajor Governmental Funds Fund Descriptions (Continued)

Tax Incremental Financing (TIF) - Douglas Road To account for expenditures for improvements in the Douglas Road development tax incremental district. Financing is provided by property tax proceeds in excess of those attributable to the assessed valuation of the property in the district before redevelopment. Tax Incremental Financing (TIF) - River East Residential To account for expenditures for improvements in the Northeast Neighborhood Residential development tax incremental district. Financing is provided by property tax proceeds in excess of those attributable to the assessed valuation of the property in the district before redevelopment. During TIF consolidation in 2015, this fund was renamed. It was formerly known as the TIF Northeast Residential Fund.

Certified Technology Park To account for expenditures related to acquisition, improvements, construction and maintenance of public facilities, debt service, and other permitted uses under Indiana Code 36-7-32-23 in connection with a certified technology park. Financing is provided by property tax proceeds, state gross retail and uses taxes, and other revenues.

Palais Royale Historic Preservation To account for expenditures financed by a 2 percent fee charged for all Palais Royale services.

Airport Urban Enterprise Zone To account for expenditures for improvements in the Zone area, financed by property taxes on qualifying properties in the Zone.

Vehicle Equipment Leasing To account for proceeds from capital lease-purchase agreements used to finance major equipment needs of the City.

Smart Streets Bond Capital Projects To account for capital expenditures in connection with the conversion of one-way streets to two-way streets in the downtown area. Funding is provided by a Redevelopment Authority bond.

2015 Parks Bond Capital To account for capital expenditures in the City parks with funding provided by a Building Corporation bond. 2017 Parks Bond Capital To account for capital expenditures in the City parks with funding provided by a 2017 Park District bond.

Eddy St. Commons Capital To account for capital expenditures in connection with the Eddy Street Commons phase II project with funding provided by issuance of revenue bonds.

129 City of South Bend, Indiana Other Supplemental Information Nonmajor Governmental Funds Fund Descriptions (Continued)

2018 Fire Station #9 Capital To account for the expenditures of bond funds relating to the General Obligation Bonds, Series 2018 to be used for the construction of the new Fire Station #9 and additional classroom for the Fire Training Center. 2018 Bonds Potawatomi Zoo Capital To account for the expenditures of bond funds relating to the Economic Development Revenue Bonds, Series 2018 to be used for planned capital projects to improve the City’s zoo.

2018 TIF Park Bond Capital To account for the expenditures of bond funds relating to the Redevelopment District Bonds, Series 2018 to be used for planned capital projects to improve the parks.

130 City of South Bend, Indiana Combining Balance Sheet Nonmajor Governmental Funds December 31, 2018

Special Revenue Funds Studebaker Oliver Economic Community Motor Vehicle Recreation Revitalization Development Investment Highway Nonreverting Grants State Grants DCI Operating Grants Assets Cash and cash equivalents$ 2,671,742 $ - $ 318,930 $ 152,372 $ 243,904 $ 347,782 Investments 5,321,261 - 635,206 192,615 485,780 - Receivables: Taxes ------Accounts 27,866 - - - 267 - Interest 22,391 - 2,660 855 2,070 - Intergovernmental 493,109 - - - 643 - Loans - - - 189,400 - 211,068 Due from other funds - - - - 21,833 - Advances to other funds - - 200,000 - - - Inventory ------Property held for resale - - 1 - - 2,288,072 Restricted assets ------

Total assets$ 8,536,369 $ -$ 1,156,797 $ 535,242 $ 754,497 $ 2,846,922

Liabilities Accounts payable$ 118,471 $ - $ 34,895 $ - $ 4,536 $ 271,579 Due to other funds ------Advances from other funds ------Performance deposits payable ------Accrued liabilities and other: Accrued payroll payable 72,855 - - - 40,414 - Other current payables - - -- - 2,698

Total liabilities 191,326 - 34,895 - 44,950 274,277

Fund Balances Nonspendable ------Restricted 8,345,043 1,121,902 535,242 - 2,572,645 Committed ------Assigned - - - - 709,547 - Unassigned ------

Total fund balances 8,345,043 - 1,121,902 535,242 709,547 2,572,645

Total liabilities and fund balances$ 8,536,369 $ -$ 1,156,797 $ 535,242 $ 754,497 $ 2,846,922

131 City of South Bend, Indiana Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2018

Special Revenue Funds Law Juvenile Enforcement LOIT 2016 Police State Positive Unsafe Continuing Landlord Loss Recovery Local Road and Special Seizure Assistance Building Education Registration Fund Street Distribution Assets Cash and cash equivalents$ 75,727 $ 4,371 $ 181,580 $ 148,795 $ 3,378 $ 209,179 $ 1,310,279 $ 253,205 Investments 150,824 8,706 361,650 296,352 6,728 416,619 2,609,659 504,304 Receivables: Taxes ------Accounts 100 - 3,271 10,550 - - 2,938 - Interest 634 37 1,531 1,263 28 1,766 11,027 2,069 Intergovernmental ------157,455 - Loans ------Due from other funds ------Advances to other funds ------Inventory ------Property held for resale ------Restricted assets ------

Total assets$ 227,285 $ 13,114 $ 548,032 $ 456,960 $ 10,134 $ 627,564 $ 4,091,358 $ 759,578

Liabilities Accounts payable$ - $ - $ 10,655 $ 94,142 $ - $ - $ 132,176 $ 166,762 Due to other funds ------Advances from other funds ------Performance deposits payable - - 6,000 - - - - - Accrued liabilities and other: Accrued payroll payable - - 4,663 - - - - - Other current payables ------

Total liabilities - - 21,318 94,142 -- 132,176 166,762

Fund Balances Nonspendable ------Restricted 227,285 - - 362,818 - - 3,959,182 592,816 Committed - 13,114 526,714 - 10,134 627,564 - - Assigned ------Unassigned ------

Total fund balances 227,285 13,114 526,714 362,818 10,134 627,564 3,959,182 592,816

Total liabilities and fund balances$ 227,285 $ 13,114 $ 548,032 $ 456,960 $ 10,134 $ 627,564 $ 4,091,358 $ 759,578

132 City of South Bend, Indiana Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2018

Special Revenue Funds

Local Road and Morris and Morris PAC Economic Human Rights Bridge Matching Palais Self-Promoted Police Block Development Indiana River Federal Grant Marketing Events Grants Commission Hazmat Rescue Assets Cash and cash equivalents$ 153,566 $ 110,096 $ 19,168 $ 33,927 $ 1,331 $ - $ 6,364 $ 60,569 Investments 374,868 219,277 38,177 67,571 2,652 - 12,675 120,635 Receivables: Taxes ------Accounts ------3,275 15,600 Interest 1,268 924 158 274 11 - 53 530 Intergovernmental 10,000 ------Loans ------Due from other funds ------Advances to other funds ------Inventory ------Property held for resale ------Restricted assets ------

Total assets$ 539,702 $ 330,297 $ 57,503 $ 101,772 $ 3,994 $ -$ 22,367 $ 197,334

Liabilities Accounts payable$ 3,496 $ - $ - $ - $ - $ - $ - $ 6,564 Due to other funds ------Advances from other funds ------Performance deposits payable ------Accrued liabilities and other: Accrued payroll payable 1,478 ------69 Other current payables ------

Total liabilities 4,974 ------6,633

Fund Balances Nonspendable ------Restricted 534,728 330,297 - - 3,994 - - - Committed - - 57,503 101,772 - - 22,367 190,701 Assigned ------Unassigned ------

Total fund balances 534,728 330,297 57,503 101,772 3,994 - 22,367 190,701

Total liabilities and fund balances$ 539,702 $ 330,297 $ 57,503 $ 101,772 $ 3,994 $ -$ 22,367 $ 197,334

133 City of South Bend, Indiana Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2018

Special Revenue Funds Leaf Urban Collection Industrial COPS Block Regional Police COPS MORE Federal Drug Development and Police K-9 Revolving Grant II Academy Grant Enforcement Gift Action Grant Removal Unit Fund Assets Cash and cash equivalents$ 26,716 $ 32,904 $ 67,532 $ 153,920 $ 55,092 $ 9,667 $ 198,319 $ 779 $ 1,632,491 Investments - 65,535 134,503 - 109,725 19,253 394,989 1,551 - Receivables: Taxes ------Accounts - - 4,159 - 100 - 31,667 - - Interest - 275 548 281 463 81 1,662 7 - Intergovernmental ------Loans - - - - - 506,401 - - 5,276,676 Due from other funds ------Advances to other funds ------Inventory ------Property held for resale ------76,300 Restricted assets ------

Total assets$ 26,716 $ 98,714 $ 206,742 $ 154,201 $ 165,380 $ 535,402 $ 626,637 $ 2,337 $ 6,985,467

Liabilities Accounts payable$ - $ 140 $ 18,563 $ - $ 12,205 $ - $ - $ - $ - Due to other funds ------Advances from other funds - - - - - 480,253 - - - Performance deposits payable ------Accrued liabilities and other: Accrued payroll payable ------1,172 - - Other current payables ------1,000

Total liabilities - 140 18,563 - 12,205 480,253 1,172 - 1,000

Fund Balances Nonspendable ------Restricted 26,716 - 188,179 154,201 153,175 55,149 - - 6,984,467 Committed - 98,574 ------Assigned ------625,465 2,337 - Unassigned ------

Total fund balances 26,716 98,574 188,179 154,201 153,175 55,149 625,465 2,337 6,984,467

Total liabilities and fund balances$ 26,716 $ 98,714 $ 206,742 $ 154,201 $ 165,380 $ 535,402 $ 626,637 $ 2,337 $ 6,985,467

134 City of South Bend, Indiana Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2018

Debt Service Funds Special College South Bend Revenue Football Redevelopment Coveleski Bond Redevelopment Building 2015 Parks Bond Funds Hall of Fame Bond - Airport Debt Service Bond - Palais Corporation Smart Streets Debt Service Total Debt Service Taxable Reserve Royale Debt Service Debt Service Fund Assets Cash and cash equivalents$ 8,483,685 $ 32,370 $ 346,939 $ 175,589 $ 580,029 $ 586,747 $ 1,726,790 $ 560,431 Investments 12,551,115 64,471 690,992 349,717 1,155,233 - - - Receivables: Taxes ------Accounts 99,793 ------Interest 52,866 209 2,904 1,469 4,854 - - - Intergovernmental 661,207 ------Loans 6,183,545 ------Due from other funds 21,833 ------Advances to other funds 200,000 ------Inventory ------Property held for resale 2,364,373 ------Restricted assets ------

Total assets$ 30,618,417 $ 97,050 $ 1,040,835 $ 526,775 $ 1,740,116 $ 586,747 $ 1,726,790 $ 560,431

Liabilities Accounts payable$ 874,184 $ - $ - $ - $ - $ - $ - $ - Due to other funds - - 659 - 1,102 - - - Advances from other funds 480,253 ------Performance deposits payable 6,000 ------Accrued liabilities and other: Accrued payroll payable 120,651 ------Other current payables 3,698 ------

Total liabilities 1,484,786 -659 - 1,102 -- -

Fund Balances Nonspendable ------Restricted 26, 147,839 97,050 1,040,176 526,775 1,739,014 586,747 1,726,790 560,431 Committed 1,648,443 ------Assigned 1,337,349 ------Unassigned ------

Total fund balances 29,133,631 97,050 1,040,176 526,775 1,739,014 586,747 1,726,790 560,431

Total liabilities and fund balances$ 30,618,417 $ 97,050 $ 1,040,835 $ 526,775 $ 1,740,116 $ 586,747 $ 1,726,790 $ 560,431

135 City of South Bend, Indiana Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2018

Capital Projects Debt Service Funds Funds Century 2018 TIF Center Energy Redevelopment Eddy St. Fire Station Park Bonds Debt Service Professional Conservation Authority Commons 2017 Parks Bond No. 9 Debt Service Funds Sports Debt Service Debt Service Debt Service Debt Service Debt Service Reserve Total Development Assets Cash and cash equivalents$ 90,351 $ 210,492 $ 3,452,908 $ 49,245 $ - $ 331,278 $ 8,143,169 $ - Investments 79,965 - - 98,080 - 659,800 3,098,258 - Receivables: Taxes ------Accounts ------Interest 336 - - 318 - 2,772 12,862 - Intergovernmental ------Loans ------Due from other funds ------Advances to other funds ------Inventory ------Property held for resale ------Restricted assets ------

Total assets$ 170,652 $ 210,492 $ 3,452,908 $ 147,643 $ -$ 993,850 $ 11,254,289 $ -

Liabilities Accounts payable$ - $ - $ - $ - $ - $ - $ - $ - Due to other funds ------1,761 - Advances from other funds ------Performance deposits payable ------Accrued liabilities and other: Accrued payroll payable ------Other current payables ------

Total liabilities ------1,761 -

Fund Balances Nonspendable ------Restricted 170,652 210,492 3,452,908 147,643 - 993,850 11,252,528 - Committed ------Assigned ------Unassigned ------

Total fund balances 170,652 210,492 3,452,908 147,643 - 993,850 11,252,528 -

Total liabilities and fund balances$ 170,652 $ 210,492 $ 3,452,908 $ 147,643 $ -$ 993,850 $ 11,254,289 $ -

136 City of South Bend, Indiana Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2018

Capital Projects Funds Morris Redevelopment Coveleski Park Cumulative Cumulative Performing Retail Area Stadium Nonreverting Capital Capital Arts Center (Leighton TIF - West Redevelopment Capital Capital Development Improvement Capital Plaza) Washington General Assets Cash and cash equivalents$ 24,487 $ - $ 176,503 $ 149,334 $ 126,380 $ 3,369 $ 600,693 $ 205,335 Investments 48,769 - 351,537 297,426 251,708 5,000 1,196,389 408,962 Receivables: Taxes ------Accounts ------Interest 205 - 1,391 1,208 1,048 76 4,964 1,718 Intergovernmental ------Loans ------Due from other funds ------Advances to other funds ------Inventory ------Property held for resale ------436,000 - Restricted assets ------

Total assets$ 73,461 $ -$ 529,431 $ 447,968 $ 379,136 $ 8,445 $ 2,238,046 $ 616,015

Liabilities Accounts payable$ - $ - $ - $ - $ 1,127 $ - $ 19,380 $ - Due to other funds ------Advances from other funds ------Performance deposits payable ------Accrued liabilities and other: Accrued payroll payable ------Other current payables ------

Total liabilities - - -- 1,127 - 19,380 -

Fund Balances Nonspendable ------Restricted - - 529,431 447,968 - 8,445 2,218,666 - Committed 73,461 - - - 378,009 - - 616,015 Assigned ------Unassigned ------

Total fund balances 73,461 - 529,431 447,968 378,009 8,445 2,218,666 616,015

Total liabilities and fund balances$ 73,461 $ -$ 529,431 $ 447,968 $ 379,136 $ 8,445 $ 2,238,046 $ 616,015

137 City of South Bend, Indiana Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2018

Capital Projects Funds

TIF No. 1 - Certified Palais Royale Southside Football Hall of TIF River East TIF Douglas TIF - River East Technology Historic Development Fame Capital Major Moves Development Road Residential Park Preservation Assets Cash and cash equivalents$ 3,152,773 $ 141,891 $ 924,547 $ 3,666,140 $ 68,134 $ 997,013 $ 208,139 $ 43,150 Investments 6,279,321 282,601 1,841,403 7,301,783 135,701 1,985,732 414,546 85,941 Receivables: Taxes 133,911 ------Accounts ------1,866 Interest 26,129 1,188 7,738 30,086 570 8,054 1,741 361 Intergovernmental ------Loans ------Due from other funds ------Advances to other funds - - 2,781,424 - - - - - Inventory ------Property held for resale - - - 13,950 - - - - Restricted assets ------

Total assets$ 9,592,134 $ 425,680 $ 5,555,112 $ 11,011,959 $ 204,405 $ 2,990,799 $ 624,426 $ 131,318

Liabilities Accounts payable$ 426,684 $ - $ 37,175 $ 12,683 $ - $ - $ - $ 31,537 Due to other funds ------Advances from other funds - 425,680 - - - 2,781,424 - - Performance deposits payable ------Accrued liabilities and other: Accrued payroll payable ------Other current payables ------

Total liabilities 426,684 425,680 37,175 12,683 - 2,781,424 - 31,537

Fund Balances Nonspendable ------Restricted 9,165,450 - 5,517,937 10,999,276 204,405 209,375 624,426 - Committed ------99,781 Assigned ------Unassigned ------

Total fund balances 9,165,450 - 5,517,937 10,999,276 204,405 209,375 624,426 99,781

Total liabilities and fund balances$ 9,592,134 $ 425,680 $ 5,555,112 $ 11,011,959 $ 204,405 $ 2,990,799 $ 624,426 $ 131,318

138 City of South Bend, Indiana Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2018

Capital Projects Funds

Airport Urban Vehicle Smart Streets 2015 Parks 2017 Parks Eddy St. 2018 Fire 2018 Bonds Enterprise Equipment Bond Capital Bond Capital Bond Capital Commons Station #9 Potawatomi Zone Leasing Projects Projects Projects Capital Capital Zoo Capital Assets Cash and cash equivalents$ 131,262 $ 1,392,303 $ 68,843 $ 471,687 $ 4,326,706 $ 7,650,244 $ 1,168,054 $ 3,264,860 Investments 261,431 1,501 - - 8,617,421 - 2,326,391 - Receivables: Taxes ------Accounts ------Interest 1,098 6 - - 36,341 - 9,773 - Intergovernmental ------Loans ------Due from other funds ------Advances to other funds ------Inventory ------Property held for resale ------Restricted assets ------

Total assets$ 393,791 $ 1,393,810 $ 68,843 $ 471,687 $ 12,980,468 $ 7,650,244 $ 3,504,218 $ 3,264,860

Liabilities Accounts payable$ - $ 107,476 $ - $ 24,200 $ 509,635 $ - $ 569,853 $ - Due to other funds ------Advances from other funds ------Performance deposits payable ------Accrued liabilities and other: Accrued payroll payable ------Other current payables - - -- - 25,564 - -

Total liabilities - 107,476 - 24,200 509,635 25,564 569,853 -

Fund Balances Nonspendable ------Restricted - 1,286,334 68,843 447,487 12,470,833 7,624,680 2,934,365 3,264,860 Committed 393,791 ------Assigned ------Unassigned ------

Total fund balances 393,791 1,286,334 68,843 447,487 12,470,833 7,624,680 2,934,365 3,264,860

Total liabilities and fund balances$ 393,791 $ 1,393,810 $ 68,843 $ 471,687 $ 12,980,468 $ 7,650,244 $ 3,504,218 $ 3,264,860

139 City of South Bend, Indiana Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2018

Capital Projects Funds

2018 TIF Capital Total Nonmajor Park Bond Project Funds Governmental Capital Total Funds Assets Cash and cash equivalents$ 3,477,629 $ 32,439,476 $ 49,066,330 Investments 6,926,331 39,019,894 54,669,267 Receivables: Taxes - 133,911 133,911 Accounts - 1,866 101,659 Interest 29,187 162,882 228,610 Intergovernmental - - 661,207 Loans - - 6,183,545 Due from other funds - - 21,833 Advances to other funds - 2,781,424 2,981,424 Inventory - - - Property held for resale - 449,950 2,814,323 Restricted assets - - -

Total assets$ 10,433,147 $ 74,989,403 $ 116,862,109

Liabilities Accounts payable$ 265,876 $ 2,005,626 $ 2,879,810 Due to other funds - - 1,761 Advances from other funds - 3,207,104 3,687,357 Performance deposits payable - - 6,000 Accrued liabilities and other: Accrued payroll payable - - 120,651 Other current payables - 25,564 29,262

Total liabilities 265,876 5,238,294 6,724,841

Fund Balances Nonspendable - - - Restricted 10,167,271 68,190,052 105,590,419 Committed - 1,561,057 3,209,500 Assigned - - 1,337,349 Unassigned - --

Total fund balances 10,167,271 69,751,109 110,137,268

Total liabilities and fund balances$ 10,433,147 $ 74,989,403 $ 116,862,109

140 City of South Bend, Indiana Combining Statement of Revenue, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Year Ended December 31, 2018

Special Revenue Funds Studebaker Oliver Economic Community Juvenile Motor Vehicle Recreation Revitalization Development Investment Police State Positive Highway Nonreverting Grants State Grants DCI Operating Grants Seizure Assistance

Revenue Property taxes $ - $ - $ - $ - $ - $ - $ - $ - Hotel/motel taxes ------Intergovernmental 6,982,767 - 28,198 - 270,192 3,542,536 - - Charges for services - 949,993 - - 312,335 - - - Fines and forfeitures ------138 Investment income 140,637 15,276 16,541 6,901 14,287 1,163 3,769 237 Rental income ------Other revenue 25,058 7,863 - 4,999 7,245 193,140 33,273 750

Total revenue 7,148,462 973,132 44,739 11,900 604,059 3,736,839 37,042 1,125

Expenditures Current: General government ------Public safety ------7,856 854 Highways and streets 9,421,468 ------Community and economic development - - 118,621 55,662 2,863,993 4,664,248 - - Culture and recreation - 961,383 ------Bond issuance costs ------Capital outlay ------Debt service: Principal 719,631 - - 65,591 - - - - Interest on long-term debt 37,504 - -6,419 - - - -

Total expenditures 10,178,603 961,383 118,621 127,672 2,863,993 4,664,248 7,856 854

Excess of Revenue (Under) Over Expenditures (3,030,141) 11,749 (73,882) (115,772) (2,259,934) (927,409) 29,186 271

Other Financing Sources (Uses) Debt proceeds ------Premium on debt ------Proceeds from sale of capital assets 33,212 ------Transfers in 3,814,963 - - - 1,866,020 - - - Transfers out - (798,976) ------

Total other financing sources (uses) 3,848,175 (798,976) - -1,866,020 - - -

Net Change in Fund Balances 818,034 (787,227) (73,882) (115,772) (393,914) (927,409) 29,186 271

Fund Balances - Beginning of year 7,527,009 787,227 1,195,784 651,014 1,103,461 3,500,054 198,099 12,843

Fund Balances - End of year$ 8,345,043 $ -$ 1,121,902 $ 535,242 $ 709,547 $ 2,572,645 $ 227,285 $ 13,114

141 City of South Bend, Indiana Combining Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds Year Ended December 31, 2018

Special Revenue Funds Law Enforcement LOIT 2016 Local Road and Unsafe Continuing Landlord Loss Recovery Local Road and Special Human Rights Bridge Matching Building Education Registration Fund Street Distribution Federal Grant

Revenue Property taxes $ - $ - $ - $ - $ - $ - $ - $ - Hotel/motel taxes ------Intergovernmental - - - - 2,412,146 670,000 74,580 - Charges for services 120,101 124,466 310 - - - - - Fines and forfeitures 55,310 64,797 ------Investment income 6,246 10,045 144 13,025 71,601 37,694 9,015 6,494 Rental income ------Other revenue 8,962 18,377 - - 85,572 185,735 23,303 -

Total revenue 190,619 217,685 454 13,025 2,569,319 893,429 106,898 6,494

Expenditures Current: General government - - 5 98,130 - - 150,820 - Public safety 657,733 419,485 ------Highways and streets - - - - 1,814,822 1,349,806 - 1,984,147 Community and economic development ------Culture and recreation ------Bond issuance costs ------Capital outlay ------Debt service: Principal ------Interest on long-term debt ------

Total expenditures 657,733 419,485 5 98,130 1,814,822 1,349,806 150,820 1,984,147

Excess of Revenue (Under) Over Expenditures (467,114) (201,800) 449 (85,105) 754,497 (456,377) (43,922) (1,977,653)

Other Financing Sources (Uses) Debt proceeds ------Premium on debt ------Proceeds from sale of capital assets ------Transfers in 648,273 - - - - 254,000 - 1,370,500 Transfers out (27,500) - - - (284,500) (1,340,000) - -

Total other financing sources (uses) 620,773 - - - (284,500) (1,086,000) - 1,370,500

Net Change in Fund Balances 153,659 (201,800) 449 (85,105) 469,997 (1,542,377) (43,922) (607,153)

Fund Balances - Beginning of year 373,055 564,618 9,685 712,669 3,489,185 2,135,193 578,650 937,450

Fund Balances - End of year$ 526,714 $ 362,818 $ 10,134 $ 627,564 $ 3,959,182 $ 592,816 $ 534,728 $ 330,297

142 City of South Bend, Indiana Combining Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds Year Ended December 31, 2018

Special Revenue Funds

Morris and Morris PAC Economic Palais Self-Promoted Police Block Development Indiana River COPS Block Regional Police Marketing Events Grants Commission Hazmat Rescue Grant II Academy

Revenue Property taxes $ - $ - $ - $ - $ - $ - $ - $ - Hotel/motel taxes ------Intergovernmental ------Charges for services 17,373 100,932 - - 3,275 116,190 - 21,191 Fines and forfeitures ------Investment income 1,043 840 72 250 451 2,827 - 1,747 Rental income ------Other revenue - - - - 3 - - -

Total revenue18,416 101,772 72 250 3,729 119,017 - 22,938

Expenditures Current: General government ------Public safety - - - - 8,834 56,727 21,735 8,367 Highways and streets ------Community and economic development ------Culture and recreation 16,083 ------Bond issuance costs ------Capital outlay ------Debt service: Principal ------Interest on long-term debt ------

Total expenditures16,083 - - - 8,834 56,727 21,735 8,367

Excess of Revenue (Under) Over Expenditures2,333 101,772 72 250 (5,105) 62,290 (21,735) 14,571

Other Financing Sources (Uses) Debt proceeds ------Premium on debt ------Proceeds from sale of capital assets - - - - - 5,152 - - Transfers in ------Transfers out - - - (28,126) - - - -

Total other financing sources (uses) - - - (28,126) - 5,152 - -

Net Change in Fund Balances 2,333 101,772 72 (27,876) (5,105) 67,442 (21,735) 14,571

Fund Balances - Beginning of year 55,170 - 3,922 27,876 27,472 123,259 48,451 84,003

Fund Balances - End of year$ 57,503 $ 101,772 $ 3,994 $ -$ 22,367 $ 190,701 $ 26,716 $ 98,574

143 City of South Bend, Indiana Combining Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds Year Ended December 31, 2018

Special Revenue Funds Leaf Urban Collection Industrial COPS MORE Federal Drug Development and Police K-9 Industrial Grant Enforcement Gift Action Grant Removal Unit Revolving Total

Revenue Property taxes $ - $ - $ - $ - $ - $ - $ - $ - Hotel/motel taxes ------Intergovernmental 101,310 ------14,081,729 Charges for services - - - - 447,241 - 28,037 2,241,444 Fines and forfeitures ------120,245 Investment income 2,343 2,772 2,557 6,219 14,329 52 206,484 595,061 Rental income ------Other revenue 30,797 42,636 108,790 259,121 - - - 1,035,624

Total revenue 134,450 45,408 111,347 265,340 461,570 52 234,521 18,074,103

Expenditures Current: General government - - 55,545 - 95,645 - - 400,145 Public safety 56,012 22,100 - - - 601 - 1,260,304 Highways and streets ------14,570,243 Community and economic development ------102,258 7,804,782 Culture and recreation ------977,466 Bond issuance costs ------Capital outlay ------Debt service: Principal - - - - 48,404 - - 833,626 Interest on long-term debt - - - - 576 - - 44,499

Total expenditures56,012 22,100 55,545 - 144,625 601 102,258 25,891,065

Excess of Revenue (Under) Over Expenditures78,438 23,308 55,802 265,340 316,945 (549) 132,263 (7,816,962)

Other Financing Sources (Uses) Debt proceeds ------Premium on debt ------Proceeds from sale of capital assets ------38,364 Transfers in ------7,953,756 Transfers out - - - - (550,000) - - (3,029,102)

Total other financing sources (uses) - - - -(550,000) - - 4,963,018

Net Change in Fund Balances 78,438 23,308 55,802 265,340 (233,055) (549) 132,263 (2,853,944)

Fund Balances - Beginning of year 109,741 130,893 97,373 (210,191) 858,520 2,886 6,852,204 31,987,575

Fund Balances - End of year$ 188,179 $ 154,201 $ 153,175 $ 55,149 $ 625,465 $ 2,337 $ 6,984,467 $ 29,133,631

144 City of South Bend, Indiana Combining Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds Year Ended December 31, 2018

Debt Service Funds College South Bend Century Football Redevelopment Coveleski Bond Redevelopment Building Center Energy Hall of Fame Bond - Airport Debt Service Bond - Palais Corporation Smart Streets 2015 Parks Bond Conservation Debt Service Taxable Reserve Royale Debt Service Debt Service Debt Service Debt Service

Revenue Property taxes $ 426,604 $ - $ - $ - $ - $ - $ - $ - Hotel/motel taxes ------221,437 Intergovernmental 28,705 ------Charges for services ------Fines and forfeitures ------Investment income 114 19,131 9,426 31,985 10,088 4,589 2,787 112 Rental income ------Other revenue ------110,048

Total revenue 455,423 19,131 9,426 31,985 10,088 4,589 2,787 331,597

Expenditures Current: General government ------Public safety ------Highways and streets ------Community and economic development ------Culture and recreation ------Bond issuance costs ------Capital outlay ------Debt service: Principal 620,000 - - - 1,801,815 940,000 210,000 162,702 Interest on long-term debt 11,315 - - - 355,205 770,444 169,106 143,034

Total expenditures 631,315 - - - 2,157,020 1,710,444 379,106 305,736

Excess of Revenue (Under) Over Expenditures (175,892) 19,131 9,426 31,985 (2,146,932) (1,705,855) (376,319) 25,861

Other Financing Sources (Uses) Debt proceeds ------Premium on debt ------Proceeds from sale of capital assets 248,724 ------Transfers in - - - - 2,158,975 1,714,000 347,259 85,909 Transfers out - (17,814) - (29,783) - - - -

Total other financing sources (uses) 248,724 (17,814) - (29,783) 2,158,975 1,714,000 347,259 85,909

Net Change in Fund Balances 72,832 1,317 9,426 2,202 12,043 8,145 (29,060) 111,770

Fund Balances - Beginning of year 24,218 1,038,859 517,349 1,736,812 574,704 1,718,645 589,491 58,882

Fund Balances - End of year$ 97,050 $ 1,040,176 $ 526,775 $ 1,739,014 $ 586,747 $ 1,726,790 $ 560,431 $ 170,652

145 City of South Bend, Indiana Combining Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds Year Ended December 31, 2018

Debt Service Funds Capital Projects Funds 2018 TIF Redevelopment Eddy St. Park Bonds Professional Coveleski Authority Commons 2017 Parks Bond Fire Station #9 Debt Service Sports Stadium Debt Service Debt Service Debt Service Debt Service Reserve Total Development Capital

Revenue Property taxes $ - $ - $ 703,118 $ - $ - $ 1,129,722 $ - $ - Hotel/motel taxes - - - - - 221,437 - - Intergovernmental - - 37,107 - - 65,812 - - Charges for services ------Fines and forfeitures ------Investment income 4,699 6,428 722 - 355 90,436 37 1,083 Rental income ------Other revenue - - - - - 110,048 7,431 29,082

Total revenue4,699 6,428 740,947 - 355 1,617,455 7,468 30,165

Expenditures Current: General government ------Public safety ------Highways and streets ------Community and economic development ------Culture and recreation ------Bond issuance costs ------Capital outlay ------11,249 Debt service: Principal 1,915,000 25,000 350,000 75,000 - 6,099,517 770,000 - Interest on long-term debt 1,192,219 1,253,472 243,304 45,663 - 4,183,762 44,870 -

Total expenditures 3,107,219 1,278,472 593,304 120,663 - 10,283,279 814,870 11,249

Excess of Revenue (Under) Over Expenditures (3,102,520) (1,272,044) 147,643 (120,663) 355 (8,665,824) (807,402) 18,916

Other Financing Sources (Uses) Debt proceeds - - - - 993,495 993,495 - - Premium on debt ------Proceeds from sale of capital assets - - - - - 248,724 - - Transfers in 3,115,000 2,223,472 - 120,663 - 9,765,278 783,696 - Transfers out (324,220) - - - - (371,817) - -

Total other financing sources (uses) 2,790,780 2,223,472 - 120,663 993,495 10,635,680 783,696 -

Net Change in Fund Balances (311,740) 951,428 147,643 - 993,850 1,969,856 (23,706) 18,916

Fund Balances - Beginning of year 522,232 2,501,480 - - - 9,282,672 23,706 54,545

Fund Balances - End of year$ 210,492 $ 3,452,908 $ 147,643 $ -$ 993,850 $ 11,252,528 $ -$ 73,461

146 City of South Bend, Indiana Combining Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds Year Ended December 31, 2018

Capital Projects Funds Morris Redevelopment Park Cumulative Cumulative Performing Retail Area TIF No. 1 - Nonreverting Capital Capital Arts Center (Leighton TIF - West Redevelopment Southside Capital Development Improvement Capital Plaza) Washington General Development

Revenue Property taxes $ - $ 436,677 $ - $ - $ - $ 332,220 $ - $ 2,300,548 Hotel/motel taxes ------Intergovernmental - 38,374 236,379 - - - - - Charges for services 4,665 - - 101,251 - - - - Fines and forfeitures ------Investment income 1,162 8,589 5,690 7,220 2,739 38,440 3,187 151,204 Rental income ------Other revenue 27,600 - 25,000 - 62,656 - 607,302 3,020

Total revenue33,427 483,640 267,069 108,471 65,395 370,660 610,489 2,454,772

Expenditures Current: General government ------Public safety ------Highways and streets ------Community and economic development ------Culture and recreation ------Bond issuance costs ------Capital outlay 44,855 - - 146,190 103,744 814,872 1,894 1,112,636 Debt service: Principal - 549,419 ------Interest on long-term debt - 25,983 ------

Total expenditures44,855 575,402 - 146,190 103,744 814,872 1,894 1,112,636

Excess of Revenue (Under) Over Expenditures (11,428) (91,762) 267,069 (37,719) (38,349) (444,212) 608,595 1,342,136

Other Financing Sources (Uses) Debt proceeds ------Premium on debt ------Proceeds from sale of capital assets ------Transfers in ------28,126 - Transfers out (126,675) - (249,500) - (132,306) - (28,100) -

Total other financing sources (uses) (126,675) - (249,500) - (132,306) - 26 -

Net Change in Fund Balances (138,103) (91,762) 17,569 (37,719) (170,655) (444,212) 608,621 1,342,136

Fund Balances - Beginning of year 138,103 621,193 430,399 415,728 179,100 2,662,878 7,394 7,823,314

Fund Balances - End of year$ - $ 529,431 $ 447,968 $ 378,009 $ 8,445 $ 2,218,666 $ 616,015 $ 9,165,450

147 City of South Bend, Indiana Combining Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds Year Ended December 31, 2018

Capital Projects Funds

Certified Palais Royale Airport Urban Football Hall of TIF River East TIF Douglas TIF - River East Technology Historic Enterprise Fame Capital Major Moves Development Road Residential Park Preservation Zone

Revenue Property taxes $ - $ - $ 3,062,820 $ - $ 4,686,651 $ - $ - $ - Hotel/motel taxes ------Intergovernmental ------Charges for services ------19,527 - Fines and forfeitures ------Investment income 7,819 168,444 162,582 3,585 6,164 11,173 2,156 7,046 Rental income ------Other revenue - - 68,556 - 6 - - -

Total revenue7,819 168,444 3,293,958 3,585 4,692,821 11,173 21,683 7,046

Expenditures Current: General government ------Public safety ------Highways and streets - 703,883 ------Community and economic development ------Culture and recreation ------Bond issuance costs ------Capital outlay 29,142 - 484,211 - 2,026 - 31,537 - Debt service: Principal ------Interest on long-term debt - - - -116,911 - - -

Total expenditures29,142 703,883 484,211 - 118,937 - 31,537 -

Excess of Revenue (Under) Over Expenditures (21,323) (535,439) 2,809,747 3,585 4,573,884 11,173 (9,854) 7,046

Other Financing Sources (Uses) Debt proceeds ------Premium on debt ------Proceeds from sale of capital assets ------Transfers in 21,323 - - - 61 - - - Transfers out - - - - (4,693,972) - - -

Total other financing sources (uses) 21,323 - - - (4,693,911) - - -

Net Change in Fund Balances - (535,439) 2,809,747 3,585 (120,027) 11,173 (9,854) 7,046

Fund Balances - Beginning of year - 6,053,376 8,189,529 200,820 329,402 613,253 109,635 386,745

Fund Balances - End of year$ - $ 5,517,937 $ 10,999,276 $ 204,405 $ 209,375 $ 624,426 $ 99,781 $ 393,791

148 City of South Bend, Indiana Combining Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds Year Ended December 31, 2018

Capital Projects Funds

Vehicle Smart Streets 2015 Parks 2017 Parks Eddy St. 2018 Fire 2018 Bonds 2018 TIF Equipment Bond Capital Bond Capital Bond Capital Commons Station #9 Potawatomi Park Bond Leasing Projects Projects Projects Capital Capital Zoo Capital Capital

Revenue Property taxes $ - $ - $ - $ - $ - $ - $ - $ - Hotel/motel taxes ------Intergovernmental ------Charges for services ------Fines and forfeitures ------Investment income 31,435 1,060 4,813 194,603 121 57,325 2,000 3,807 Rental income ------Other revenue ------

Total revenue31,435 1,060 4,813 194,603 121 57,325 2,000 3,807

Expenditures Current: General government ------Public safety ------Highways and streets ------Community and economic development ------Culture and recreation ------Bond issuance costs - - - 17,750 - - 148,135 - Capital outlay 3,795,628 972,373 2,036,618 1,594,978 8,479,191 2,205,276 439,955 934,144 Debt service: Principal ------Interest on long-term debt ------

Total expenditures 3,795,628 972,373 2,036,618 1,612,728 8,479,191 2,205,276 588,090 934,144

Excess of Revenue (Under) Over Expenditures (3,764,193) (971,313) (2,031,805) (1,418,125) (8,479,070) (2,147,951) (586,090) (930,337)

Other Financing Sources (Uses) Debt proceeds 3,028,368 - - - - 5,045,000 3,440,000 11,001,505 Premium on debt - - - - - 37,316 346,189 96,103 Proceeds from sale of capital assets ------Transfers in 101,776 - - - - - 64,761 - Transfers out (210,118) - (288) - - - - -

Total other financing sources (uses) 2,920,026 - (288) - - 5,082,316 3,850,950 11,097,608

Net Change in Fund Balances (844,167) (971,313) (2,032,093) (1,418,125) (8,479,070) 2,934,365 3,264,860 10,167,271

Fund Balances - Beginning of year 2,130,501 1,040,156 2,479,580 13,888,958 16,103,750 - - -

Fund Balances - End of year$ 1,286,334 $ 68,843 $ 447,487 $ 12,470,833 $ 7,624,680 $ 2,934,365 $ 3,264,860 $ 10,167,271

149 City of South Bend, Indiana Combining Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds Year Ended December 31, 2018

Capital Projects Funds

Total Nonmajor Governmental Total Funds

Revenue Property taxes $ 10,818,916 $ 11,948,638 Hotel/motel taxes - 221,437 Intergovernmental 274,753 14,422,294 Charges for services 125,443 2,366,887 Fines and forfeitures - 120,245 Investment income 883,484 1,568,981 Rental income - - Other revenue 830,653 1,976,325

Total revenue 12,933,249 32,624,807

Expenditures Current: General government - 400,145 Public safety - 1,260,304 Highways and streets 703,883 15,274,126 Community and economic development - 7,804,782 Culture and recreation - 977,466 Bond issuance costs 165,885 165,885 Capital outlay 23,240,519 23,240,519 Debt service: Principal 1,319,419 8,252,562 Interest on long-term debt 187,764 4,416,025

Total expenditures 25,617,470 61,791,814

Excess of Revenue (Under) Over Expenditures (12,684,221) (29,167,007)

Other Financing Sources (Uses) Debt proceeds 22,514,873 23,508,368 Premium on debt 479,608 479,608 Proceeds from sale of capital assets - 287,088 Transfers in 999,743 18,718,777 Transfers out (5,440,959) (8,841,878)

Total other financing sources (uses) 18,553,265 34,151,963

Net Change in Fund Balances 5,869,044 4,984,956

Fund Balances - Beginning of year 63,882,065 105,152,312

Fund Balances - End of year$ 69,751,109 $ 110,137,268

150 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Major Governmental Funds Capital Projects Funds - River West TIF Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - property $ 18,358,133 $ 18,662,835 $ 18,662,835 $ - Taxes - hotel/motel 395,000 395,000 395,000 - Intergovernmental - 365,000 22,988 (342,012) Charges for services - 4,320 3,220 (1,100) Investment income 200,000 450,000 490,094 40,094 Other - 4,724,184 4,671,057 (53,127)

Total revenues 18,953,133 24,601,339 24,245,194 (356,145)

Expenditures: Current: Economic development: Other services and charges 8,457,172 12,929,620 7,287,437 5,642,183 Capital outlay 18,042,828 31,158,587 14,557,517 16,601,070

Total expenditures 26,500,000 44,088,207 21,844,954 22,243,253

Other financing sources (uses): Transfers in 34,000 39,881 45,896 6,015 Transfers out - (4,267,975) (4,267,975) -

Net change in fund balances (7,512,867) (23,714,962) (1,821,839) 21,893,123

Fund balances - beginning 33,563,915 33,563,915 33,563,915 -

Fund balances - ending $ 26,051,048 $ 9,848,953 $ 31,742,076 $ 21,893,123

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (1,821,839) To adjust revenues for accruals (1,020,934) To adjust expenditures for accruals (2,746,579) To adjust expenditures for encumbrances 6,484,951

Net change in fund balance, GAAP basis $ 895,599

151 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds Special Revenue Funds - Motor Vehicle Highway Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 7,220,000 $ 6,870,731 $ 6,870,730 $ (1) Charges for services 223,365 223,365 244,703 21,338 Investment income 30,861 139,982 137,767 (2,215) Other 26,082 44,199 25,058 (19,141)

Total revenues 7,500,308 7,278,277 7,278,258 (19)

Expenditures: Current: Highways and streets: Personnel services 4,747,217 4,747,217 4,236,841 510,376 Supplies 2,448,534 2,648,084 1,701,021 947,063 Other services and charges 4,838,467 4,970,812 4,271,818 698,994 Capital outlay - 27,868 27,868 -

Total expenditures 12,034,218 12,393,981 10,237,548 2,156,433

Other Financing Sources (Uses): Proceeds from sale of capital assets - 33,212 33,212 - Transfers in 3,787,750 3,814,963 3,814,963 -

Net change in fund balances (746,160) (1,267,529) 888,885 2,156,414

Fund balances - beginning 7,132,834 7,132,834 7,132,834 -

Fund balances - ending $ 6,386,674 $ 5,865,305 $ 8,021,719 $ 2,156,414

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 888,885 To adjust revenues for accruals (129,796) To adjust expenditures for accruals (913,333) To adjust expenditures for encumbrances 972,278

Net change in fund balance, GAAP basis $ 818,034

152 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Recreation Nonreverting Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 1,392,436 $ 1,516,205 $ 972,422 $ (543,783) Investment income 6,000 15,000 15,514 514 Other 125,000 125,840 7,863 (117,977)

Total revenues 1,523,436 1,657,045 995,799 (661,246)

Expenditures: Current: Culture and recreation: Personnel services 500,648 516,417 330,407 186,010 Supplies 275,561 294,708 122,292 172,416 Other services and charges 696,021 804,278 518,772 285,506 Capital outlay 125,000 125,000 9,998 115,002

Total expenditures 1,597,230 1,740,403 981,469 758,934

Other Financing Sources (Uses): Transfers out - (850,000) (798,976) 51,024

Net change in fund balances (73,794) (933,358) (784,646) 148,712

Fund balances - beginning 785,885 785,885 785,885 -

Fund balances - ending $ 712,091 $ (147,473) $ 1,239 $ 148,712

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (784,646) To adjust revenues for accruals (22,667) To adjust expenditures for accruals 20,086 To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ (787,227)

153 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Studebaker Oliver Revitalization Grants Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ - $ 101,014 $ 63,513 $ (37,501) Investment income 4,000 15,500 16,217 717 Other 100,000 100,000 100,000 -

Total revenues 104,000 216,514 179,730 (36,784)

Expenditures: Current: Economic development: Other services and charges 940,000 1,078,598 98,594 980,004

Total expenditures 940,000 1,078,598 98,594 980,004

Net change in fund balances (836,000) (862,084) 81,136 943,220

Fund balances - beginning 876,414 876,414 876,414 -

Fund balances - ending $ 40,414 $ 14,330 $ 957,550 $ 943,220

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 81,136 To adjust revenues for accruals (134,991) To adjust expenditures for accruals (277,809) To adjust expenditures for encumbrances 257,782

Net change in fund balance, GAAP basis $ (73,882)

154 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Economic Development State Grants Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ - $ 675,232 $ 2,375 $ (672,857) Investment income 7,919 13,019 11,782 (1,237) Other 65,593 65,593 49,009 (16,584)

Total revenues 73,512 753,844 63,166 (690,678)

Expenditures: Current: Economic development: Other services and charges 72,013 929,990 127,672 802,318

Total expenditures 72,013 929,990 127,672 802,318

Net change in fund balances 1,499 (176,146) (64,506) 111,640

Fund balances - beginning 410,752 410,752 410,752 -

Fund balances - ending $ 412,251 $ 234,606 $ 346,246 $ 111,640

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (64,506) To adjust revenues for accruals (51,266) To adjust expenditures for accruals (81,000) To adjust expenditures for encumbrances 81,000

Net change in fund balance, GAAP basis $ (115,772)

155 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - DCI Operating Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 440,636 $ 440,636 $ 270,192 $ (170,444) Charges for services 333,500 337,335 338,582 1,247 Fines and forfeitures 2,000 2,000 - (2,000) Investment income 10,000 16,000 14,158 (1,842) Other - 4,525 4,256 (269)

Total revenues 786,136 800,496 627,188 (173,308)

Expenditures: Current: Economic development: Personnel services 2,175,705 2,175,705 2,095,383 80,322 Supplies 23,486 24,968 19,501 5,467 Other services and charges 636,583 876,423 759,969 116,454

Total expenditures 2,835,774 3,077,096 2,874,853 202,243

Other financing sources (uses): Transfers in 1,866,020 1,866,020 1,866,020 - Transfers out - - - -

Net change in fund balances (183,618) (410,580) (381,645) 28,935

Fund balances - beginning 1,114,625 1,114,625 1,114,625 -

Fund balances - ending $ 931,007 $ 704,045 $ 732,980 $ 28,935

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (381,645) To adjust revenues for accruals (23,129) To adjust expenditures for accruals (82,437) To adjust expenditures for encumbrances 93,297

Net change in fund balance, GAAP basis $ (393,914)

156 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Community Investment Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 2,711,000 $ 6,687,141 $ 3,542,536 $ (3,144,605) Fines and forfeitures 1,000 1,000 110 (890) Investment income 2,000 2,000 1,163 (837) Other 197,000 218,204 202,281 (15,923)

Total revenues 2,911,000 6,908,345 3,746,090 (3,162,255)

Expenditures: Current: Economic development: Other services and charges 2,911,000 6,874,598 3,848,101 3,026,497

Total expenditures 2,911,000 6,874,598 3,848,101 3,026,497

Net change in fund balances - 33,747 (102,011) (135,758)

Fund balances - beginning 450,607 450,607 450,607 -

Fund balances - ending $ 450,607 $ 484,354 $ 348,596 $ (135,758)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (102,011) To adjust revenues for accruals (9,251) To adjust expenditures for accruals (3,550,062) To adjust expenditures for encumbrances 2,733,915

Net change in fund balance, GAAP basis $ (927,409)

157 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Police State Seizure Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 30,000 $ 36,737 $ 36,737 $ - Investment income 2,000 4,000 3,692 (308) Other - 300 300 -

Total revenues 32,000 41,037 40,729 (308)

Expenditures: Current: Public safety: Other services and charges 32,000 32,000 7,856 24,144

Total expenditures 32,000 32,000 7,856 24,144

Net change in fund balances - 9,037 32,873 23,836

Fund balances - beginning 194,467 194,467 194,467 -

Fund balances - ending $ 194,467 $ 203,504 $ 227,340 $ 23,836

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 32,873 To adjust revenues for accruals (3,687) To adjust expenditures for accruals - To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ 29,186

158 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Juvenile Positive Assistance Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Fines and forfeitures $ 200 $ 200 $ 138 $ (62) Investment income 100 230 232 2 Other - 750 750 -

Total revenues 300 1,180 1,120 (60)

Expenditures: Current: Public safety: Other services and charges 1,000 1,000 854 146

Total expenditures 1,000 1,000 854 146

Net change in fund balances (700) 180 266 86

Fund balances - beginning 12,860 12,860 12,860 -

Fund balances - ending $ 12,160 $ 13,040 $ 13,126 $ 86

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 266 To adjust revenues for accruals 5 To adjust expenditures for accruals - To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ 271

159 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Unsafe Building Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 199,500 $ 181,410 $ 120,643 $ (60,767) Fines and forfeitures 61,000 99,250 72,893 (26,357) Investment income - 5,500 5,889 389

Total revenues 260,500 286,160 199,425 (86,735)

Expenditures: Current: General government: Personnel services 294,907 287,407 248,778 38,629 Supplies 26,450 26,650 21,415 5,235 Other services and charges 587,416 600,856 387,248 213,608 Capital outlay - 30,000 - 30,000

Total expenditures 908,773 944,913 657,441 287,472

Other financing sources (uses): Transfers in 648,273 648,273 648,273 - Transfers out - (27,500) (27,500) -

Net change in fund balances - (37,980) 162,757 200,737

Fund balances - beginning 379,148 379,148 379,148 -

Fund balances - ending $ 379,148 $ 341,168 $ 541,905 $ 200,737

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 162,757 To adjust revenues for accruals (8,806) To adjust expenditures for accruals (181,038) To adjust expenditures for encumbrances 180,746

Net change in fund balance, GAAP basis $ 153,659

160 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Law Enforcement Continuing Education Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 140,000 $ 140,000 $ 124,980 $ (15,020) Fines and forfeitures 106,000 106,886 78,353 (28,533) Investment income 5,000 10,000 9,917 (83) Other 20,500 32,394 18,146 (14,248)

Total revenues 271,500 289,280 231,396 (57,884)

Expenditures: Current: Public safety: Supplies 275,500 359,091 173,990 185,101 Other services and charges 263,000 272,533 183,461 89,072

Total expenditures 538,500 631,624 357,451 274,173

Net change in fund balances (267,000) (342,344) (126,055) 216,289

Fund balances - beginning 573,049 573,049 573,049 -

Fund balances - ending $ 306,049 $ 230,705 $ 446,994 $ 216,289

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (126,055) To adjust revenues for accruals (13,711) To adjust expenditures for accruals (169,080) To adjust expenditures for encumbrances 107,046

Net change in fund balance, GAAP basis $ (201,800)

161 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Landlord Registration Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Licenses and permits $ 4,000 $ 4,000 $ 310 $ (3,690) Fines and forfeitures 2,000 2,000 - (2,000) Investment income - 140 137 (3)

Total revenues 6,000 6,140 447 (5,693)

Expenditures: Current: General government: Other services and charges 1,000 1,000 5 995

Total expenditures 1,000 1,000 5 995

Net change in fund balances 5,000 5,140 442 (4,698)

Fund balances - beginning 9,685 9,685 9,685 -

Fund balances - ending $ 14,685 $ 14,825 $ 10,127 $ (4,698)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 442 To adjust revenues for accruals 7 To adjust expenditures for accruals - To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ 449

162 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Loss Recovery Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 4,000 $ 12,500 $ 12,871 $ 371

Total revenues 4,000 12,500 12,871 371

Expenditures: Current: General government: Other services and charges 250,000 488,641 208,065 280,576 Capital outlay - 26,682 24,273 2,409

Total expenditures 250,000 515,323 232,338 282,985

Net change in fund balances (246,000) (502,823) (219,467) 283,356

Fund balances - beginning 847,926 847,926 847,926 -

Fund balances - ending $ 601,926 $ 345,103 $ 628,459 $ 283,356

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (219,467) To adjust revenues for accruals 154 To adjust expenditures for accruals 86,702 To adjust expenditures for encumbrances 47,506

Net change in fund balance, GAAP basis $ (85,105)

163 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Local Road and Street Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 1,850,000 $ 2,120,078 $ 2,120,078 $ - Investment income 18,000 68,000 70,031 2,031 Other - 412,635 412,635 -

Total revenues 1,868,000 2,600,713 2,602,744 2,031

Expenditures: Current: Highways and streets: Supplies 670,000 670,364 555,400 114,964 Other services and charges 780,000 1,405,106 751,121 653,985 Capital outlay 600,000 1,058,538 418,854 639,684

Total expenditures 2,050,000 3,134,008 1,725,375 1,408,633

Other financing sources (uses): Transfers out - (284,500) (284,500) -

Net change in fund balances (182,000) (817,795) 592,869 1,410,664

Fund balances - beginning 3,340,696 3,340,696 3,340,696 -

Fund balances - ending $ 3,158,696 $ 2,522,901 $ 3,933,565 $ 1,410,664

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 592,869 To adjust revenues for accruals (33,425) To adjust expenditures for accruals (1,294,157) To adjust expenditures for encumbrances 1,204,710

Net change in fund balance, GAAP basis $ 469,997

164 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - LOIT 2016 Special Distribution Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 2,200,000 $ 1,070,000 $ 670,000 $ (400,000) Investment income 40,000 40,000 37,969 (2,031) Other - 185,735 185,734 (1)

Total revenues 2,240,000 1,295,735 893,703 (402,032)

Expenditures: Current: Highways and streets: Other services and charges - 648,058 390,739 257,319 Capital outlay 2,950,000 1,519,291 939,155 580,136

Total expenditures 2,950,000 2,167,349 1,329,894 837,455

Other financing sources (uses): Transfers in - 254,000 254,000 - Transfers out - (1,340,000) (1,340,000) -

Net change in fund balances (710,000) (1,957,614) (1,522,191) 435,423

Fund balances - beginning 2,281,338 2,281,338 2,281,338 -

Fund balances - ending $ 1,571,338 $ 323,724 $ 759,147 $ 435,423

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (1,522,191) To adjust revenues for accruals (274) To adjust expenditures for accruals (856,175) To adjust expenditures for encumbrances 836,263

Net change in fund balance, GAAP basis $ (1,542,377)

165 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Human Rights Federal Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 145,000 $ 145,000 $ 74,580 $ (70,420) Investment income 2,000 8,400 8,862 462 Other 20,400 25,440 23,303 (2,137)

Total revenues 167,400 178,840 106,745 (72,095)

Expenditures: Current: General government: Personnel services 80,013 80,013 78,642 1,371 Supplies 2,000 2,000 1,772 228 Other services and charges 80,900 90,321 68,899 21,422

Total expenditures 162,913 172,334 149,313 23,021

Net change in fund balances 4,487 6,506 (42,568) (49,074)

Fund balances - beginning 503,002 503,002 503,002 -

Fund balances - ending $ 507,489 $ 509,508 $ 460,434 $ (49,074)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (42,568) To adjust revenues for accruals 153 To adjust expenditures for accruals (1,507) To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ (43,922)

166 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Local Road and Bridge Grant Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ - $ 5,500 $ 6,282 $ 782

Total revenues - 5,500 6,282 782

Expenditures: Current: Highways and streets: Other services and charges - 2,130,500 2,039,640 90,860

Total expenditures - 2,130,500 2,039,640 90,860

Other Financing Sources (Uses): Transfers in - 1,370,500 1,370,500 -

Net change in fund balances - (754,500) (662,858) 91,642

Fund balances - beginning 992,943 992,943 992,943 -

Fund balances - ending $ 992,943 $ 238,443 $ 330,085 $ 91,642

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (662,858) To adjust revenues for accruals 212 To adjust expenditures for accruals (27,798) To adjust expenditures for encumbrances 83,291

Net change in fund balance, GAAP basis $ (607,153)

167 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Morris and Palais Marketing Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 20,000 $ 20,000 $ 17,373 $ (2,627) Investment income 400 1,020 1,025 5

Total revenues 20,400 21,020 18,398 (2,622)

Expenditures: Current: Culture and recreation: Other services and charges 18,000 18,000 16,083 1,917

Total expenditures 18,000 18,000 16,083 1,917

Net change in fund balances 2,400 3,020 2,315 (705)

Fund balances - beginning 55,239 55,239 55,239 -

Fund balances - ending $ 57,639 $ 58,259 $ 57,554 $ (705)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 2,315 To adjust revenues for accruals 18 To adjust expenditures for accruals - To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ 2,333

168 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Morris PAC Self-Promotion Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 99,000 $ 130,000 $ 100,932 $ (29,068) Investment income 1,000 1,000 786 (214)

Total revenues 100,000 131,000 101,718 (29,282)

Expenditures: Current: Culture and recreation: Other services and charges 50,000 50,000 - 50,000

Total expenditures 50,000 50,000 - 50,000

Net change in fund balances 50,000 81,000 101,718 20,718

Fund balances - beginning - - - -

Fund balances - ending $ 50,000 $ 81,000 $ 101,718 $ 20,718

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 101,718 To adjust revenues for accruals 54 To adjust expenditures for accruals - To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ 101,772

169 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Police Block Grants Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 35 $ 70 $ 70 $ -

Net change in fund balances 35 70 70 -

Fund balances - beginning 3,927 3,927 3,927 -

Fund balances - ending $ 3,962 $ 3,997 $ 3,997 $ -

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 70 To adjust revenues for accruals 2 To adjust expenditures for accruals - To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ 72

170 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Economic Development Commission Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 200 $ 259 $ 259 $ -

Other financing sources (uses): Transfers out - (28,126) (28,126) -

Net change in fund balances 200 (27,867) (27,867) -

Fund balances - beginning 27,910 27,910 27,910 -

Fund balances - ending $ 28,110 $ 43 $ 43 $ -

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (27,867) To adjust revenues for accruals (9) To adjust expenditures for accruals - To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ (27,876)

171 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Hazmat Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 10,000 $ 10,000 $ - $ (10,000) Investment income 200 450 451 1

Total revenues 10,200 10,450 451 (9,999)

Expenditures: Current: Public safety: Supplies 10,000 10,000 8,834 1,166

Net change in fund balances 200 450 (8,383) (8,833)

Fund balances - beginning 27,506 27,506 27,506 -

Fund balances - ending $ 27,706 $ 27,956 $ 19,123 $ (8,833)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (8,383) To adjust revenues for accruals 3,278 To adjust expenditures for accruals (472) To adjust expenditures for encumbrances 472

Net change in fund balance, GAAP basis $ (5,105)

172 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Indiana River Rescue Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 45,000 $ 97,000 $ 100,590 $ 3,590 Investment income 500 2,600 2,726 126

Total revenues 45,500 99,600 103,316 3,716

Expenditures: Current: Public safety: Personnel services 15,500 15,500 3,000 12,500 Supplies 17,800 17,800 13,277 4,523 Other services and charges 68,500 68,500 34,264 34,236

Total expenditures 101,800 101,800 50,541 51,259

Other financing sources (uses): Proceeds from sale of capital assets - 5,152 5,152 -

Net change in fund balances (56,300) 2,952 57,927 54,975

Fund balances - beginning 123,859 123,859 123,859 -

Fund balances - ending $ 67,559 $ 126,811 $ 181,786 $ 54,975

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 57,927 To adjust revenues for accruals 15,701 To adjust expenditures for accruals (13,706) To adjust expenditures for encumbrances 7,520

Net change in fund balance, GAAP basis $ 67,442

173 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - COPS Block Grant II Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Expenditures: Current: Public safety: Other services and charges $ - $ 21,735 $ 21,735 $ -

Net change in fund balances - (21,735) (21,735) -

Fund balances - beginning 48,451 48,451 48,451 -

Fund balances - ending $ 48,451 $ 26,716 $ 26,716 $ -

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (21,735) To adjust revenues for accruals - To adjust expenditures for accruals - To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ (21,735)

174 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Regional Police Academy Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 20,000 $ 25,000 $ 21,192 $ (3,808) Investment income 500 1,700 1,711 11 Other 2,000 2,000 - (2,000)

Total revenues 22,500 28,700 22,903 (5,797)

Expenditures: Current: Public safety: Supplies 1,500 1,500 190 1,310 Other services and charges 21,000 21,000 11,399 9,601

Total expenditures 22,500 22,500 11,589 10,911

Net change in fund balances - 6,200 11,314 5,114

Fund balances - beginning 87,473 87,473 87,473 -

Fund balances - ending $ 87,473 $ 93,673 $ 98,787 $ 5,114

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 11,314 To adjust revenues for accruals 35 To adjust expenditures for accruals 3,222 To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ 14,571

175 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - COPS MORE Grant Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 53,750 $ 184,819 $ 101,310 $ (83,509) Investment income 500 2,200 2,278 78 Other 37,750 39,750 26,778 (12,972)

Total revenues 92,000 226,769 130,366 (96,403)

Expenditures: Current: Public safety: Supplies 47,000 67,785 19,215 48,570 Other services and charges 45,000 45,000 43,835 1,165

Total expenditures 92,000 112,785 63,050 49,735

Net change in fund balances - 113,984 67,316 (46,668)

Fund balances - beginning 135,365 135,365 135,365 -

Fund balances - ending $ 135,365 $ 249,349 $ 202,681 $ (46,668)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 67,316 To adjust revenues for accruals 4,084 To adjust expenditures for accruals (34,516) To adjust expenditures for encumbrances 41,554

Net change in fund balance, GAAP basis $ 78,438

176 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Federal Drug Enforcement Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 50,000 $ 50,000 $ 6,201 $ (43,799) Investment income 1,000 2,600 2,654 54 Other - 6,677 36,436 29,759

Total revenues 51,000 59,277 45,291 (13,986)

Expenditures: Current: Public safety: Supplies 6,000 6,000 - 6,000 Capital outlay 45,000 45,000 22,100 22,900

Total expenditures 51,000 51,000 22,100 28,900

Net change in fund balances - 8,277 23,191 14,914

Fund balances - beginning 130,729 130,729 130,729 -

Fund balances - ending $ 130,729 $ 139,006 $ 153,920 $ 14,914

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 23,191 To adjust revenues for accruals 117 To adjust expenditures for accruals - To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ 23,308

177 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Gift Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 800 $ 2,400 $ 2,481 $ 81 Other 25,000 110,650 108,750 (1,900)

Total revenues 25,800 113,050 111,231 (1,819)

Expenditures: Current: General government: Supplies 2,500 5,000 322 4,678 Other services and charges 40,000 93,428 46,478 46,950

Total expenditures 42,500 98,428 46,800 51,628

Net change in fund balances (16,700) 14,622 64,431 49,809

Fund balances - beginning 100,898 100,898 100,898 -

Fund balances - ending $ 84,198 $ 115,520 $ 165,329 $ 49,809

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 64,431 To adjust revenues for accruals 116 To adjust expenditures for accruals (47,221) To adjust expenditures for encumbrances 38,476

Net change in fund balance, GAAP basis $ 55,802

178 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Urban Development Action Grant Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 6,110 $ 6,610 $ 6,344 $ (266) Other 132,618 37,508 37,508 -

Total revenues 138,728 44,118 43,852 (266)

Expenditures: Current: Economic development: Other services and charges 610,131 486,081 486,081 -

Net change in fund balances (471,403) (441,963) (442,229) (266)

Fund balances - beginning 471,939 471,939 471,939 -

Fund balances - ending $ 536 $ 29,976 $ 29,710 $ (266)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (442,229) To adjust revenues for accruals 221,488 To adjust expenditures for accruals 486,081

Net change in fund balance, GAAP basis $ 265,340

179 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Leaf Collection and Removal Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 439,680 $ 439,680 $ 447,240 $ 7,560 Investment income 6,120 13,579 14,198 619

Total revenues 445,800 453,259 461,438 8,179

Expenditures: Current: Highways and streets: Personnel services 50,729 50,729 46,529 4,200 Supplies 4,344 4,344 1,184 3,160 Other services and charges 96,969 96,969 95,740 1,229

Total expenditures 152,042 152,042 143,453 8,589

Other financing sources (uses): Transfers out (550,000) (550,000) (550,000) -

Net change in fund balances (256,242) (248,783) (232,015) 16,768

Fund balances - beginning 822,096 822,096 822,096 -

Fund balances - ending $ 565,854 $ 573,313 $ 590,081 $ 16,768

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (232,015) To adjust revenues for accruals 132 To adjust expenditures for accruals (1,172)

Net change in fund balance, GAAP basis $ (233,055)

180 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Police K-9 Unit Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 20 $ 50 $ 51 $ 1 Other 2,000 2,000 - (2,000)

Total revenues 2,020 2,050 51 (1,999)

Expenditures: Current: Public safety: Other services and charges 2,020 2,020 601 1,419

Net change in fund balances - 30 (550) (580)

Fund balances - beginning 2,889 2,889 2,889 -

Fund balances - ending $ 2,889 $ 2,919 $ 2,339 $ (580)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (550) To adjust revenues for accruals 1

Net change in fund balance, GAAP basis $ (549)

181 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Special Revenue Funds - Industrial Revolving Fund Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 183,000 $ 212,000 $ 206,484 $ (5,516) Other 27,000 30,750 28,037 (2,713)

Total revenues 210,000 242,750 234,521 (8,229)

Expenditures: Current: Economic Development: Other services and charges 157,000 157,000 102,258 54,742

Net change in fund balances 53,000 85,750 132,263 46,513

Fund balances - beginning 2,917,106 2,917,106 2,917,106 -

Fund balances - ending $ 2,970,106 $ 3,002,856 $ 3,049,369 $ 46,513

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 132,263

Net change in fund balance, GAAP basis $ 132,263

182 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Funds - College Football Hall of Fame Debt Service Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - property $ 1,213,617 $ 426,604 $ 426,604 $ - Intergovernmental 45,000 45,000 28,705 (16,295) Investment income - 141 114 (27) Other - 274,768 248,724 (26,044)

Total revenues 1,258,617 746,513 704,147 (42,366)

Expenditures: Current: Debt service: Other services and charges 1,258,617 632,315 631,315 1,000

Net change in fund balances - 114,198 72,832 (41,366)

Fund balances - beginning 27,305 27,305 27,305 -

Fund balances - ending $ 27,305 $ 141,503 $ 100,137 $ (41,366)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 72,832 To adjust revenues for accruals - To adjust expenditures for accruals - To adjust expenditures for encumbrances -

Net change in fund balance, GAAP basis $ 72,832

183 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Funds - Redevelopment Bond - Airport Taxable Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 14,000 $ 17,500 $ 18,472 $ 972

Other financing sources (uses): Transfers out (14,000) (16,000) (17,155) (1,155)

Net change in fund balances - 1,500 1,317 (183)

Fund balances - beginning 1,040,462 1,040,462 1,040,462 -

Fund balances - ending $ 1,040,462 $ 1,041,962 $ 1,041,779 $ (183)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 1,317 To adjust revenues for accruals 659 To adjust expenditures for accruals (659)

Net change in fund balance, GAAP basis $ 1,317

184 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Funds - Coveleski Bond Debt Service Reserve Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 5,000 $ 9,000 $ 9,251 $ 251

Net change in fund balances 5,000 9,000 9,251 251

Fund balances - beginning 517,990 517,990 517,990 -

Fund balances - ending $ 522,990 $ 526,990 $ 527,241 $ 251

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 9,251 To adjust revenues for accruals 175

Net change in fund balance, GAAP basis $ 9,426

185 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Funds - Redevelopment Bond - Palais Royale Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 20,000 $ 30,000 $ 30,882 $ 882

Other financing sources (uses): Transfers out (20,000) (30,000) (28,681) 1,319

Net change in fund balances - - 2,201 2,201

Fund balances - beginning 1,739,495 1,739,495 1,739,495 -

Fund balances - ending $ 1,739,495 $ 1,739,495 $ 1,741,696 $ 2,201

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 2,201 To adjust revenues for accruals 1,103 To adjust expenditures for accruals (1,102)

Net change in fund balance, GAAP basis $ 2,202

186 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Fund - South Bend Building Corporation Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 1,000 $ 10,400 $ 10,314 $ (86)

Expenditures: Current: Debt service: Other services and charges 2,636,025 2,636,025 2,636,875 (850)

Other financing sources (uses): Transfers in 2,635,025 2,646,000 2,646,000 -

Net change in fund balances - 20,375 19,439 (936)

Fund balances - beginning 771,586 771,586 771,586 -

Fund balances - ending $ 771,586 $ 791,961 $ 791,025 $ (936)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 19,439 To adjust revenues for accruals (487,251) To adjust expenditures for accruals 479,855

Net change in fund balance, GAAP basis $ 12,043

187 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Fund - Smart Street Debt Service Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 2,500 $ 4,600 $ 4,588 $ (12)

Expenditures: Current: Debt service: Other services and charges 1,709,794 1,710,444 1,710,444 -

Other Financing Sources (Uses): Transfers in 1,714,000 1,714,000 1,714,000 -

Net change in fund balances 6,706 8,156 8,144 (12)

Fund balances - beginning 1,718,645 1,718,645 1,718,645 -

Fund balances - ending $ 1,725,351 $ 1,726,801 $ 1,726,789 $ (12)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 8,144 To adjust revenues for accruals 1

Net change in fund balance, GAAP basis $ 8,145

188 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Fund - 2015 Parks Bond Debt Service Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 800 $ 2,800 $ 2,787 $ (13) Other - - 31,723 31,723

Total revenues 800 2,800 34,510 31,710

Expenditures: Current: Debt service: Other services and charges 380,107 380,107 379,106 1,001

Other Financing Sources (Uses): Transfers in 379,107 379,107 347,259 (31,848)

Net change in fund balances (200) 1,800 2,663 863

Fund balances - beginning 557,768 557,768 557,768 -

Fund balances - ending $ 557,568 $ 559,568 $ 560,431 $ 863

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 2,663 To adjust revenues for accruals (31,723)

Net change in fund balance, GAAP basis $ (29,060)

189 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Funds - Century Center Energy Conservation Debt Service Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - hotel/motel $ 221,437 $ 221,437 $ 221,437 $ - Investment income 50 70 36 (34) Other 109,462 110,049 110,049 -

Total revenues 330,949 331,556 331,522 (34)

Expenditures: Current: Debt service: Other services and charges 306,737 306,737 305,736 1,001

Other financing sources (uses): Transfers in 89,175 89,175 85,909 (3,266)

Net change in fund balances 113,387 113,994 111,695 (2,299)

Fund balances - beginning 58,882 58,882 58,882 -

Fund balances - ending $ 172,269 $ 172,876 $ 170,577 $ (2,299)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 111,695 To adjust revenues for accruals 75

Net change in fund balance, GAAP basis $ 111,770

190 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Fund - Redevelopment Authority Debt Service Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 2,700 $ 5,500 $ 4,699 $ (801)

Expenditures: Current: Debt service: Other services and charges 3,105,829 3,106,029 3,107,219 (1,190)

Other Financing Sources (Uses): Transfers in 3,364,500 3,364,500 3,115,000 (249,500) Transfers out (260,000) (324,221) (324,220) 1

Net change in fund balances 1,371 (60,250) (311,740) (251,490)

Fund balances - beginning 522,232 522,232 522,232 -

Fund balances - ending $ 523,603 $ 461,982 $ 210,492 $ (251,490)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (311,740)

Net change in fund balance, GAAP basis $ (311,740)

191 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Funds - Eddy St. Commons Debt Service Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ - $ 6,500 $ 6,428 $ (72)

Expenditures: Current: Debt service: Other services and charges 1,279,472 3,779,472 1,278,472 2,501,000

Other Financing Sources (Uses): Transfers in 1,279,472 1,279,472 2,223,472 944,000

Net change in fund balances - (2,493,500) 951,428 3,444,928

Fund balances - beginning 2,501,480 2,501,480 2,501,480 -

Fund balances - ending $ 2,501,480 $ 7,980 $ 3,452,908 $ 3,444,928

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 951,428

Net change in fund balance, GAAP basis $ 951,428

192 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Funds - 2017 Parks Bond Debt Service Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - property $ - $ 703,118 $ 703,118 $ - Intergovernmental - 37,106 37,107 1 Investment income - 763 722 (41)

Total revenues - 740,987 740,947 (40)

Expenditures: Current: Debt service: Other services and charges - 595,304 593,304 2,000

Net change in fund balances - 145,683 147,643 (2,040)

Fund balances - beginning - - - -

Fund balances - ending $ - $ 145,683 $ 147,643 $ (2,040)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 147,643

Net change in fund balance, GAAP basis $ 147,643

193 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Debt Service Funds - 2018 TIF Park Bonds Debt Service Reserve Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ - $ - $ 355 $ 355

Other Financing Sources (Uses): Debt proceeds 993,495 993,495 -

Net change in fund balances 993,495 993,850 355

Fund balances - beginning - - - -

Fund balances - ending $ - $ 993,495 $ 993,850 $ 355

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 993,850

Net change in fund balance, GAAP basis $ 993,850

194 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Professional Sports Development Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 600,000 $ 600,000 $ - $ (600,000) Investment income 2,000 2,000 37 (1,963) Other 18,000 18,000 7,431 (10,569)

Total revenues 620,000 620,000 7,468 (612,532)

Expenditures: Current: Debt service: Other services and charges 814,870 814,870 814,870 -

Total expenditures 814,870 814,870 814,870 -

Other financing sources (uses): Transfers in - 783,697 783,696 (1)

Net change in fund balances (194,870) 588,827 (23,706) (612,533)

Fund balances - beginning 23,743 23,743 23,743 -

Fund balances - ending $ (171,127) $ 612,570 $ 37 $ (612,533)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (23,706)

Net change in fund balance, GAAP basis $ (23,706)

195 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Coveleski Stadium Capital Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 43,500 $ 43,500 $ 29,082 $ (14,418) Investment income 750 1,000 1,054 54

Total revenues 44,250 44,500 30,136 (14,364)

Expenditures: Current: Culture and recreation: Other services and charges 80,000 35,000 1,249 33,751 Capital outlay 65,000 55,000 10,000 45,000

Total expenditures 145,000 90,000 11,249 78,751

Net change in fund balances (100,750) (45,500) 18,887 64,387

Fund balances - beginning 54,612 54,612 54,612 -

Fund balances - ending $ (46,138) $ 9,112 $ 73,499 $ 64,387

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 18,887 To adjust revenues for accruals 29 To adjust expenditures for accruals (64,622) To adjust expenditures for encumbrances 64,622

Net change in fund balance, GAAP basis $ 18,916

196 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Park NonReverting Capital Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 17,100 $ 17,822 $ 4,665 $ (13,157) Investment income 1,500 1,500 1,200 (300) Other 22,000 49,600 27,600 (22,000)

Total revenues 40,600 68,922 33,465 (35,457)

Expenditures: Current: Culture and recreation: Supplies 51,000 86,372 36,361 50,011 Other services and charges 54,000 84,000 15,634 68,366 Capital outlay 76,000 107,500 31,500 76,000

Total expenditures 181,000 277,872 83,495 194,377

Other financing sources (uses): Transfers in 80,000 80,000 - (80,000) Transfers out - (130,000) (126,675) 3,325

Net change in fund balances (60,400) (258,950) (176,705) 82,245

Fund balances - beginning 176,978 176,978 176,978 -

Fund balances - ending $ 116,578 $ (81,972) $ 273 $ 82,245

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (176,705) To adjust revenues for accruals (38) To adjust expenditures for accruals 38,640

Net change in fund balance, GAAP basis $ (138,103)

197 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Cumulative Capital Development Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - Property $ 419,000 $ 436,677 $ 436,677 $ - Intergovernmental 37,100 38,374 38,373 (1) Investment income 3,100 8,500 8,476 (24)

Total revenues 459,200 483,551 483,526 (25)

Expenditures: Current: General government: Other services and charges 459,200 575,402 575,402 -

Net change in fund balances - (91,851) (91,876) (25)

Fund balances - beginning 622,016 622,016 622,016 -

Fund balances - ending $ 622,016 $ 530,165 $ 530,140 $ (25)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (91,876) To adjust revenues for accruals 114

Net change in fund balance, GAAP basis $ (91,762)

198 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Cumulative Capital Improvement Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 250,500 $ 236,379 $ 236,379 $ - Investment income 3,000 5,500 5,563 63 Other 25,000 25,000 25,000 -

Total revenues 278,500 266,879 266,942 63

Expenditures: Current: General government: Other services and charges 250,500 1,000 - 1,000 Capital outlay 28,000 28,000 - 28,000

Total expenditures 278,500 29,000 - 29,000

Other financing sources (uses): Transfers out - (249,500) (249,500) -

Net change in fund balances - (11,621) 17,442 29,063

Fund balances - beginning 430,948 430,948 430,948 -

Fund balances - ending $ 430,948 $ 419,327 $ 448,390 $ 29,063

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 17,442 To adjust revenues for accruals 127

Net change in fund balance, GAAP basis $ 17,569

199 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Morris Performing Arts Center Capital Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Charges for services $ 125,000 $ 125,000 $ 101,251 $ (23,749) Investment income 4,000 7,200 7,145 (55)

Total revenues 129,000 132,200 108,396 (23,804)

Expenditures: Current: Culture and recreation: Supplies 25,000 25,000 6,690 18,310 Other services and charges 27,500 81,400 63,882 17,518 Capital outlay 38,000 77,700 74,492 3,208

Total expenditures 90,500 184,100 145,064 39,036

Net change in fund balances 38,500 (51,900) (36,668) 15,232

Fund balances - beginning 416,215 416,215 416,215 -

Fund balances - ending $ 454,715 $ 364,315 $ 379,547 $ 15,232

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (36,668) To adjust revenues for accruals 75 To adjust expenditures for accruals (9,588) To adjust expenditures for encumbrances 8,462

Net change in fund balance, GAAP basis $ (37,719)

200 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Redevelopment Retail Area (Leighton Plaza) Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 1,706 $ 2,506 $ 2,726 $ 220 Other 195,308 195,308 73,089 (122,219)

Total revenues 197,014 197,814 75,815 (121,999)

Expenditures: Current: Economic development: Supplies 10,342 2,744 2,744 - Other services and charges 147,824 109,116 109,114 2

Total expenditures 158,166 111,860 111,858 2

Other financing sources (uses): Transfers out - (132,306) (132,306) -

Net change in fund balances 38,848 (46,352) (168,349) (121,997)

Fund balances - beginning 176,971 176,971 176,971 -

Fund balances - ending $ 215,819 $ 130,619 $ 8,622 $ (121,997)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (168,349) To adjust revenues for accruals (10,420) To adjust expenditures for accruals 8,114

Net change in fund balance, GAAP basis $ (170,655)

201 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - TIF - West Washington Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - property $ 420,000 $ 332,220 $ 332,220 $ - Investment income 16,000 37,000 38,012 1,012

Total revenues 436,000 369,220 370,232 1,012

Expenditures: Current: Economic development: Other services and charges - 835 148 687 Capital outlay 1,000,000 2,285,081 845,540 1,439,541

Total expenditures 1,000,000 2,285,916 845,688 1,440,228

Net change in fund balances (564,000) (1,916,696) (475,456) 1,441,240

Fund balances - beginning 2,279,940 2,279,940 2,279,940 -

Fund balances - ending $ 1,715,940 $ 363,244 $ 1,804,484 $ 1,441,240

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (475,456) To adjust revenues for accruals 428 To adjust expenditures for accruals (764,314) To adjust expenditures for encumbrances 795,130

Net change in fund balance, GAAP basis $ (444,212)

202 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Redevelopment General Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 135 $ 2,135 $ 2,799 $ 664 Other - 607,302 607,302 -

Total revenues 135 609,437 610,101 664

Expenditures: Current: Economic development: Other services and charges 4,500 32,600 29,994 2,606

Total expenditures 4,500 32,600 29,994 2,606

Other financing sources (uses): Transfers in - 28,126 28,126 -

Net change in fund balances (4,365) 604,963 608,233 3,270

Fund balances - beginning 7,403 7,403 7,403 -

Fund balances - ending $ 3,038 $ 612,366 $ 615,636 $ 3,270

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 608,233 To adjust revenues for accruals 388

Net change in fund balance, GAAP basis $ 608,621

203 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - TIF No. 1 - Southside Development Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - property $ 2,400,000 $ 2,166,637 $ 2,166,637 $ - Investment income 10,000 145,000 147,610 2,610 Other - 3,020 3,020 -

Total revenues 2,410,000 2,314,657 2,317,267 2,610

Expenditures: Current: Economic development: Other services and charges - 744,694 242,352 502,342 Capital outlay 4,000,000 7,811,332 459,009 7,352,323

Total expenditures 4,000,000 8,556,026 701,361 7,854,665

Net change in fund balances (1,590,000) (6,241,369) 1,615,906 7,857,275

Fund balances - beginning 7,848,685 7,848,685 7,848,685 -

Fund balances - ending $ 6,258,685 $ 1,607,316 $ 9,464,591 $ 7,857,275

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 1,615,906 To adjust revenues for accruals 137,505 To adjust expenditures for accruals (1,214,893) To adjust expenditures for encumbrances 803,618

Net change in fund balance, GAAP basis $ 1,342,136

204 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Football Hall of Fame Capital Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 5,000 $ 7,500 $ 7,687 $ 187

Expenditures: Current: General government: Other services and charges 127,000 129,227 29,891 99,336

Net change in fund balances (122,000) (121,727) (22,204) 99,523

Fund balances - beginning 448,306 448,306 448,306 -

Fund balances - ending $ 326,306 $ 326,579 $ 426,102 $ 99,523

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (22,204) To adjust revenues for accruals 21,455 To adjust expenditures for accruals 749

Net change in fund balance, GAAP basis $ -

205 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Major Moves Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 25,000 $ 50,000 $ 50,664 $ 664 Other 493,178 493,331 493,328 (3)

Total revenues 518,178 543,331 543,992 661

Expenditures: Current: Highways and streets: Other services and charges 750,000 1,593,881 671,364 922,517 Capital outlay 1,300,000 979,918 7,090 972,828

Total expenditures 2,050,000 2,573,799 678,454 1,895,345

Net change in fund balances (1,531,822) (2,030,468) (134,462) 1,896,006

Fund balances - beginning 2,910,880 2,910,880 2,910,880 -

Fund balances - ending $ 1,379,058 $ 880,412 $ 2,776,418 $ 1,896,006

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (134,462) To adjust revenues for accruals (375,548) To adjust expenditures for accruals (796,665) To adjust expenditures for encumbrances 771,236

Net change in fund balance, GAAP basis $ (535,439)

206 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - TIF - River East Development Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - property $ 2,300,000 $ 3,062,820 $ 3,062,820 $ - Investment income 57,000 157,000 158,627 1,627 Other - 74,556 72,104 (2,452)

Total revenues 2,357,000 3,294,376 3,293,551 (825)

Expenditures: Current: Economic development: Other services and charges - 417,537 347,984 69,553 Capital outlay 2,750,000 9,170,154 631,070 8,539,084

Total expenditures 2,750,000 9,587,691 979,054 8,608,637

Net change in fund balances (393,000) (6,293,315) 2,314,497 8,607,812

Fund balances - beginning 8,790,697 8,790,697 8,790,697 -

Fund balances - ending $ 8,397,697 $ 2,497,382 $ 11,105,194 $ 8,607,812

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 2,314,497 To adjust revenues for accruals 407 To adjust expenditures for accruals (4,607,139) To adjust expenditures for encumbrances 5,101,982

Net change in fund balance, GAAP basis $ 2,809,747

207 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - TIF - Douglas Road Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 350 $ 3,150 $ 3,477 $ 327

Expenditures: Current: Economic development: Other services and charges 140,450 204,650 - 204,650

Net change in fund balances (140,100) (201,500) 3,477 204,977

Fund balances - beginning 201,109 201,109 201,109 -

Fund balances - ending $ 61,009 $ (391) $ 204,586 $ 204,977

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 3,477 To adjust revenues for accruals 108

Net change in fund balance, GAAP basis $ 3,585

208 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - TIF - River East Residential Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes - property $ 4,400,000 $ 4,686,651 $ 4,686,651 $ - Investment income 2,500 9,250 4,559 (4,691) Other - - 6 6

Total revenues 4,402,500 4,695,901 4,691,216 (4,685)

Expenditures: Current: Economic development: Other services and charges 4,320,000 571,028 495,354 75,674

Total expenditures 4,320,000 571,028 495,354 75,674

Other Financing Sources (Uses): Transfers in - 67 61 (6) Transfers out - (4,693,972) (4,693,972) -

Net change in fund balances 82,500 (569,032) (498,049) 70,983

Fund balances - beginning 3,492,629 3,492,629 3,492,629 -

Fund balances - ending $ 3,575,129 $ 2,923,597 $ 2,994,580 $ 70,983

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (498,049) To adjust revenues for accruals 1,605 To adjust expenditures for accruals 376,417

Net change in fund balance, GAAP basis $ (120,027)

209 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - TIF - Certified Technology Park Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 2,500 $ 10,000 $ 10,966 $ 966

Net change in fund balances 2,500 10,000 10,966 966

Fund balances - beginning 614,013 614,013 614,013 -

Fund balances - ending $ 616,513 $ 624,013 $ 624,979 $ 966

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 10,966 To adjust revenues for accruals 207

Net change in fund balance, GAAP basis $ 11,173

210 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Palais Royale Historical Preservation Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 600 $ 2,100 $ 2,107 $ 7 Other 16,500 17,160 17,661 501

Total revenues 17,100 19,260 19,768 508

Expenditures: Current: Culture and recreation: Other services and charges 45,000 45,000 - 45,000

Net change in fund balances (27,900) (25,740) 19,768 45,508

Fund balances - beginning 109,771 109,771 109,771 -

Fund balances - ending $ 81,871 $ 84,031 $ 129,539 $ 45,508

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 19,768 To adjust revenues for accruals 1,915 To adjust expenditures for accruals (68,504) To adjust expenditures for encumbrances 36,967

Net change in fund balance, GAAP basis $ (9,854)

211 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Airport Urban Enterprise Zone Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 3,900 $ 7,000 $ 6,915 $ (85)

Expenditures: Current: Economic development: Other services and charges 50,000 50,000 - 50,000

Net change in fund balances (46,100) (43,000) 6,915 49,915

Fund balances - beginning 387,224 387,224 387,224 -

Fund balances - ending $ 341,124 $ 344,224 $ 394,139 $ 49,915

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 6,915 To adjust revenues for accruals 131

Net change in fund balance, GAAP basis $ 7,046

212 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Vehicle Equipment Leasing Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 3,000 $ 31,000 $ 31,472 $ 472

Expenditures: Current: General government: Other services and charges - 222,125 217,625 4,500 Capital outlay 4,604,750 9,681,480 6,990,658 2,690,822

Total expenditures 4,604,750 9,903,605 7,208,283 2,695,322

Other Financing Sources (Uses): Debt proceeds 4,601,750 10,717,184 6,638,312 (4,078,872) Transfers in - 101,776 101,776 - Transfers out - (219,861) (219,861) -

Net change in fund balances - 726,494 (656,584) (1,383,078)

Fund balances - beginning 3,598,717 3,598,717 3,598,717 -

Fund balances - ending $ 3,598,717 $ 4,325,211 $ 2,942,133 $ (1,383,078)

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (656,584) To adjust revenues for accruals (3,609,981) To adjust expenditures for accruals 2,424,274 To adjust expenditures for encumbrances 998,124

Net change in fund balance, GAAP basis $ (844,167)

213 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Smart Streets Bond Capital Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 1,500 $ 1,500 $ 1,060 $ (440)

Expenditures: Current: Debt service: Other services and charges 1,500 1,500 - 1,500 Capital outlay 2,100,000 2,100,000 972,373 1,127,627

Total expenditures 2,101,500 2,101,500 972,373 1,129,127

Net change in fund balances (2,100,000) (2,100,000) (971,313) 1,128,687

Fund balances - beginning 1,040,156 1,040,156 1,040,156 -

Fund balances - ending $ (1,059,844) $ (1,059,844) $ 68,843 $ 1,128,687

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (971,313)

Net change in fund balance, GAAP basis $ (971,313)

214 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - 2015 Park Bond Capital Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 4,500 $ 4,900 $ 4,813 $ (87)

Expenditures: Current: Culture and recreation: Supplies - 59,000 43,656 15,344 Other services and charges - 322,374 291,724 30,650 Capital outlay 3,004,500 2,754,867 2,468,681 286,186

Total expenditures 3,004,500 3,136,241 2,804,061 332,180

Other financing sources (uses): Transfers out - (289) (288) 1

Net change in fund balances (3,000,000) (3,131,630) (2,799,536) 332,094

Fund balances - beginning 3,271,224 3,271,224 3,271,224 -

Fund balances - ending $ 271,224 $ 139,594 $ 471,688 $ 332,094

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (2,799,536) To adjust expenditures for accruals 708,756 To adjust expenditures for encumbrances 58,687

Net change in fund balance, GAAP basis $ (2,032,093)

215 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - 2017 Park Bond Capital Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 3,000 $ 180,000 $ 186,252 $ 6,252

Expenditures: Current: Culture and recreation: Other services and charges - 148,047 147,642 405 Capital outlay 10,309,100 10,161,053 955,451 9,205,602

Total expenditures 10,309,100 10,309,100 1,103,093 9,206,007

Net change in fund balances (10,306,100) (10,129,100) (916,841) 9,212,259

Fund balances - beginning 13,888,958 13,888,958 13,888,958 -

Fund balances - ending $ 3,582,858 $ 3,759,858 $ 12,972,117 $ 9,212,259

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (916,841) To adjust revenues for accruals 8,351 To adjust expenditures for accruals (3,237,301) To adjust expenditures for encumbrances 2,727,666

Net change in fund balance, GAAP basis $ (1,418,125)

216 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - Eddy St. Commons Capital Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ 2,000 $ 135 $ 121 $ (14)

Total revenues 2,000 135 121 (14)

Expenditures: Current: Economic development: Other services and charges - 1,500 1,500 - Capital outlay 17,000,000 16,127,865 8,477,690 7,650,175

Total expenditures 17,000,000 16,129,365 8,479,190 7,650,175

Net change in fund balances (16,998,000) (16,129,230) (8,479,069) 7,650,161

Fund balances - beginning 16,129,314 16,129,314 16,129,314 -

Fund balances - ending $ (868,686) $ 84 $ 7,650,245 $ 7,650,161

Budget/GAAP reconciliation Net change in fund balance, budget basis $ (8,479,069) To adjust expenditures for accruals (7,650,242) To adjust expenditures for encumbrances 7,650,241

Net change in fund balance, GAAP basis $ (8,479,070)

217 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - 2018 Fire Station #9 Bond Capital Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ - $ 50,000 $ 55,108 $ 5,108

Expenditures: Current: Public safety: Other services and charges - 138,575 138,575 - Capital outlay - 4,906,425 1,420,290 3,486,135

Total expenditures - 5,045,000 1,558,865 3,486,135

Other Financing Sources (Uses): Debt proceeds - 5,005,758 5,005,758 -

Net change in fund balances - 10,758 3,502,001 3,491,243

Fund balances - beginning - - - -

Fund balances - ending $ - $ 10,758 $ 3,502,001 $ 3,491,243

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 3,502,001 To adjust revenues for accruals 78,775 To adjust expenditures for accruals (3,879,168) To adjust expenditures for encumbrances 3,232,757

Net change in fund balance, GAAP basis $ 2,934,365

218 City of South Bend, Indiana Other Supplemental Information Budgetary Comparison Schedule - Nonmajor Governmental Funds (Continued) Capital Projects Funds - 2018 TIF Park Bond Capital Year Ended December 31, 2018

Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Investment income $ - $ - $ (2,882) $ (2,882)

Expenditures: Current: Culture and recreation: Other services and charges - 1,530,410 355,337 1,175,073 Capital outlay - 9,402,372 223,104 9,179,268

Total expenditures - 10,932,782 578,441 10,354,341

Other Financing Sources (Uses): Debt proceeds - 11,007,782 11,007,782 -

Net change in fund balances - 75,000 10,426,459 10,351,459

Fund balances - beginning - - - -

Fund balances - ending $ - $ 75,000 $ 10,426,459 $ 10,351,459

Budget/GAAP reconciliation Net change in fund balance, budget basis $ 10,426,459 To adjust revenues for accruals 96,515 To adjust expenditures for accruals (3,514,437) To adjust expenditures for encumbrances 3,158,734

Net change in fund balance, GAAP basis $ 10,167,271

219 City of South Bend, Indiana Other Supplemental Information Nonmajor Enterprise Funds Fund Descriptions

Nonmajor Enterprise Funds Descriptions

Consolidated Building The consolidated building fund accounts for the operation of the consolidated St. Joseph County/South Bend Building Department and the South Bend Code Enforcement and Animal Care and Control Department.

Parking Garage The parking garage fund accounts for the operation and maintenance of the City's parking garages.

Solid Waste The solid waste fund accounts for the provision of solid waste services to residents and businesses.

Emergency Medical Services To account for the operations and purchases of necessary equipment for the Fire Department and Emergency Medical Services Department. Financing is provided by ambulance fees.

220 City of South Bend, Indiana Combining Statement of Net Position Nonmajor Enterprise Funds December 31, 2018

Emergency Consolidated Medical Building Parking Garage Solid Waste Services Total Assets Current assets: Cash and cash equivalents$ 699,233 $ 443,213 $ 175,677 $ 1,370,306 $ 2,688,429 Investments 1,392,649 882,739 349,893 2,729,213 5,354,494 Receivables: Accounts 5,850 44,085 394,012 1,431,149 1,875,096 Interest 5,894 3,699 1,577 17,823 28,993 Allowance for doubtful accounts - - (25,000) - (25,000) Prepaid expenses - - - 8,859 8,859 Total current assets 2,103,626 1,373,736 896,159 5,557,350 9,930,871

Noncurrent assets: Restricted assets 107,827 - 176,983 2,576,373 2,861,183 Capital assets: Assets not subject to depreciation 27,400 1,132,020 - - 1,159,420 Assets subject to depreciation 1,900,216 2,882,109 3,846,097 4,263,727 12,892,149 Total noncurrent assets 2,035,443 4,014,129 4,023,080 6,840,100 16,912,752

Total assets 4,139,069 5,387,865 4,919,239 12,397,450 26,843,623

Liabilities Current liabilities: Accounts payable 10,695 182,347 66,105 82,033 341,180 Due to other governmental units - - - 8,588 8,588 Due to other funds 706 683 - 1,563 2,952 Performance deposits payable 8,250 - - - 8,250 Accrued liabilities and other: Accrued payroll payable 54,357 - 32,630 109,314 196,301 Accrued interest payable 2,681 - 16,365 74,189 93,235 Other current payables - 44,147 - - 44,147 Compensated absences 103,152 - 32,705 199,055 334,912 Mortgage bonds payable - - - 235,000 235,000 Capital leases 118,679 - 901,146 434,910 1,454,735 Revenue bonds payable - - -- - Total current liabilities 298,520 227,177 1,048,951 1,144,652 2,719,300

Mortgage bonds payable - - - 4,521,868 4,521,868 Capital leases 306,880 - 2,094,098 1,271,825 3,672,803 Total noncurrent liabilities 306,880 - 2,094,098 5,793,693 8,194,671

Total liabilities 605,400 227,177 3,143,049 6,938,345 10,913,971

Net Position Net investment in capital assets 1,609,562 4,014,129 983,341 (1,706,507) 4,900,525 Restricted: Cash with fiscal agent 322 - - 126,436 126,758 Capital outlay fund - - 44,495 1,956,568 2,001,063 Unrestricted 1,923,785 1,146,559 748,354 5,082,608 8,901,306

Total net position$ 3,533,669 $ 5,160,688 $ 1,776,190 $ 5,459,105 $ 15,929,652

221 City of South Bend, Indiana Combining Statement of Revenue, Expenses, and Changes in Net Position Nonmajor Enterprise Funds December 31, 2018

Emergency Consolidated Parking Solid Medical Building Garage Waste Services Total Operating Revenue Licenses and permits$ 1,978,856 $ - $ - $ - $ 1,978,856 Parking fees - 1,289,639 - - 1,289,639 Solid waste fees - - 5,408,816 - 5,408,816 Charges for sales and services - - - 6,702,767 6,702,767 Other 65,726 33,885 62,548 24,876 187,035

Total operating revenue 2,044,582 1,323,524 5,471,364 6,727,643 15,567,113

Operating Expenses Other operation and maintenance 3,201,229 1,320,728 3,832,281 7,231,819 15,586,057 General and administration 743,480 32,880 735,573 - 1,511,933 Depreciation 183,236 211,743 774,998 494,269 1,664,246

Total operating expenses 4,127,945 1,565,351 5,342,852 7,726,088 18,762,236

Operating Income (Loss) (2,083,363) (241,827) 128,512 (998,445) (3,195,123)

Nonoperating Revenue (Expenses) Investment income 47,883 23,497 11,678 133,136 216,194 Interest expense (8,892) - (57,335) (196,599) (262,826) (Loss) gain on sale of assets - - (67,799) (1,064,653) (1,132,452)

Total nonoperating revenues (expenses) 38,991 23,497 (113,456) (1,128,116) (1,179,084)

Income (Loss) - Before contributions and transfers (2,044,372) (218,330) 15,056 (2,126,561) (4,374,207)

Transfers In 1,044,032 - - 25,425 1,069,457 Transfers Out - - (26,979) (221,939) (248,918)

Change in Net Position (1,000,340) (218,330) (11,923) (2,323,075) (3,553,668)

Net Position - Beginning of year (as restated) 4,534,009 5,379,018 1,788,113 7,782,180 19,483,320

Net Position - End of year $ 3,533,669 $ 5,160,688 $ 1,776,190 $ 5,459,105 $ 15,929,652

222 City of South Bend, Indiana Non-Major Enterprise Funds Combining Statement of Cash Flows Year Ended December 31, 2018

Emergency Consolidated Parking Medical Building Garage Solid Waste Services Total

Cash Flows from Operating Activities: Receipts from customers and users$ 2,062,773 $ 1,291,525 $ 5,532,844 $ 7,960,225 $ 16,847,367 Payments to suppliers (524,847) (1,164,287) (2,148,619) (1,928,144) (5,765,897) Payments to employees (2,647,232) - (1,570,069) (5,081,953) (9,299,254) Internal activity - Payments to other funds (805,320) (44,829) (851,115) (229,257) (1,930,521) Net cash provided by (used in) operating activities (1,914,626) 82,409 963,041 720,871 (148,305) Cash Flows from Noncapital Financing Activities: Transfers from other funds 1,017,053 - - 25,425 1,042,478 Transfers to other funds - - - (221,939) (221,939) Net cash (used in) provided by noncapital financing activities 1,017,053 -- (196,514) 820,539 Cash Flows from Capital and Related Financing Activities: Proceeds from capital debt issued for future capital purchase 122,720 - 1,192,960 1,550,535 2,866,215 Proceeds from sales of capital assets - - 26,312 - 26,312 Purchase of capital assets (219,508) - (1,432,467) (1,064,653) (2,716,628) Principal paid on capital debt (106,926) - (937,717) (511,941) (1,556,584) Interest paid on capital debt (10,756) - (64,275) (200,169) (275,200) Net cash (used in) provided by capital and related financing activities (214,470) - (1,215,187) (226,228) (1,655,885) Cash Flows from Investing Activities: Interest received on investments 47,974 22,134 11,190 127,019 208,317 Proceeds from sale and maturities of investment securities 831,988 (15,673) 26,616 323,054 1,165,985 Net cash provided by (used in) investing activities 879,962 6,461 37,806 450,073 1,374,302 Net (Decrease) Increase in Cash and Cash Equivalents (232,081) 88,870 (214,340) 748,202 390,651 Cash and Cash Equivalents - Beginning of year 1,039,141 354,343 537,378 1,895,912 3,826,774

Cash and Cash Equivalents - End of year $ 807,060 $ 443,213 $ 323,038 $ 2,644,114 $ 4,217,425

223 City of South Bend, Indiana Non-Major Enterprise Funds Combining Statement of Cash Flows (Continued) Year Ended December 31, 2018

Emergency Consolidated Parking Medical Building Garage Solid Waste Services Total Statement of Net Position Classification of Cash and Cash Equivalents Cash and investments$ 2,091,882 $ 1,325,952 $ 525,570 $ 4,099,519 $ 8,042,923 Restricted cash and investments 107,827 - 176,983 2,576,373 2,861,183 Less amounts classified as investments (1,392,649) (882,739) (379,515) (4,031,778) (6,686,681) Total cash and cash equivalents$ 807,060 $ 443,213 $ 323,038 $ 2,644,114 $ 4,217,425

Reconciliation of Operating Income (Loss) to Net Cash from Operating Activities Operating income (loss) (2,083,363) (241,827) 128,512 (998,445) (3,195,123) Adjustments to reconcile operating income (loss) to net cash from operating activities: Depreciation and amortization 183,236 211,743 774,998 494,269 1,664,246 Lease proceeds used for noncapital expenses - - - - - Changes in assets and liabilities: Receivables 18,191 (44,955) 61,480 1,232,582 1,267,298 Allowance for uncollectable accounts - - - - - Due from other funds - - - - - Inventory - - - - - Prepaid expenses and other assets 3,250 - - 17,775 21,025 Accounts payable (22,897) 144,536 814 (176,510) (54,057) Due to other governments - - - (66,705) (66,705) Performance deposit (3,750) - - - (3,750) Due to other funds (686) (44) - 182 (548) Accrued liabilities and other - 12,956 - - 12,956 Accrued payroll payable 10,606 - 1,779 23,837 36,222 Compensated absences payable (19,213) - (4,542) 193,886 170,131 Estimate of unfiled claims - - -- - Net cash provided by (used in) operating activities$ (1,914,626) $ 82,409 $ 963,041 $ 720,871 $ (148,305)

Noncash Investing, Capital, and Financing Activities Capital assets disposed (at cost) $ (119,635) $ - $ (484,584) $ (1,064,653) $ (1,668,872) Capital assets transferred from/to another enterprise fund (cost 46,250 - (46,250) - - Accumulated depreciation on disposals of capital - assets 119,635 - 390,473 - 510,108 Accumulated depreciation on transfers of capital assets (19,271) - 19,271 - -

224 City of South Bend, Indiana Other Supplemental Information Internal Service Funds Fund Descriptions

Internal Service Funds Descriptions

Liability Insurance Premium Reserve The Liability Insurance Premium Reserve fund accounts for expenses related to maintaining the City's self-funded liability insurance including administrative costs, claims, and premiums. Funding is provided by assessments to certain other City funds.

Self-Funded Employee Benefits To account for employer and employees' contributions for a medical insurance plan.

Central Service To account for expenses related to fuel, vehicle repairs, and various supplies provided to City departments on a cost-reimbursement basis.

Police Take Home Vehicle To account for expenses associated with claims arising from use of program vehicles occurring while officers are not on duty. Funding is provided by officers participating in the program.

Innovation & Technology/311 Call Center To account for expenses of the City’s innovation and technology department. Funding is provided by allocations and fees from various City departments.

Unemployment Compensation Insurance To account for payment of unemployment claims to the Indiana Department of Workforce Development. Financing is provided by allocating costs to user departments to cover the estimated costs of claims.

Parental Leave To account for expenses related to the City’s Parental Leave Program which provides additional paid time off for employees for the child or adoption of a child. Financing is provided by allocating costs to user departments to cover the estimated costs of the program.

225 City of South Bend, Indiana Combining Statement of Net Position Internal Service Funds December 31, 2018

Liability Innovation & Insurance Self-Funded Technology Unemployment Premium Employee Central Police Take 311 Call Compensation Parental Reserve Benefits Services Home Vehicle Center Insurance Leave Total Assets Current assets: Cash and cash equivalents$ 1,235,686 $ 4,033,610 $ 391,626 $ 250,319 $ 921,989 $ 69,698 $ 17,089 $ 6,920,017 Investments 2,461,092 7,963,517 779,995 498,557 1,836,308 138,816 34,037 13,712,322 Receivables: Accounts 13,550 16,123 60,484 - 13,937 - - 104,094 Interest 10,383 33,737 3,044 2,094 7,798 583 143 57,782 Inventory - - 870,617 - - - - 870,617 Prepaid expenses 212,645 - 3,976 - 623,209 -- 839,830 Total current assets 3,933,356 12,046,987 2,109,742 750,970 3,403,241 209,097 51,269 22,504,662

Noncurrent assets: Restricted assets - - - - 457,020 - 457,020 Capital assets: Assets subject to depreciation - - 1,284,827 - 1,100 -- 1,285,927 Total noncurrent assets - - 1,284,827 - 458,120 -- 1,742,947

Total assets 3,933,356 12,046,987 3,394,569 750,970 3,861,361 209,097 51,269 24,247,609

Liabilities Current liabilities: Accounts payable 112,880 18,963 709,800 - 130,211 2,400 - 974,254 Due to other funds - - 1,215 - - - - 1,215 Accrued liabilities and other: Accrued payroll payable 4,498 - 53,593 - 44,364 - - 102,455 Accrued interest payable - - 117 - 3,579 - - 3,696 Compensated absences 11,294 - 123,935 - 98,841 - - 234,070 Claims payable 2,139,626 919,015 - - - - - 3,058,641 Capital leases - - 14,208 - 321,898 -- 336,106 Total current liabilities 2,268,298 937,978 902,868 - 598,893 2,400 - 4,710,437

Noncurrent liabilities: Capital leases - - 18,078 - 958,285 - - 976,363 Total noncurrent liabilities - - 18,078 - 958,285 -- 976,363

Total liabilities 2,268,298 937,978 920,946 - 1,557,178 2,400 - 5,686,800

Net Position Net investment in capital assets - - 1,252,541 - - - - 1,252,541 Unrestricted 1,665,058 11,109,009 1,221,082 750,970 2,304,183 206,697 51,269 17,308,268

Total net position $ 1,665,058 $ 11,109,009 $ 2,473,623 $ 750,970 $ 2,304,183 $ 206,697 $ 51,269 $ 18,560,809

226 City of South Bend, Indiana Combining Statement of Revenue, Expenses, and Changes in Net Position Internal Service Funds December 31, 2018

Liability Innovation & Insurance Self-Funded Technology Unemployment Premium Employee Central Police Take 311 Call Compensation Parental Reserve Benefits Services Home Vehicle Center Insurance Leave Total Operating Revenue Employee/Employer contributions$ 2,058,152 $ 18,079,648 $ - $ 3,507 $ 6,769,786 $ - $ 163,651 $ 27,074,744 Charges for sales and services - - 8,201,435 - - - - 8,201,435 Other 687,727 440,913 21,663 -161,365 -- 1,311,668

Total operating revenue 2,745,879 18,520,561 8,223,098 3,507 6,931,151 - 163,651 36,587,847

Operating Expenses Other operation and maintenance - 1,163,785 8,009,579 18,198 5,954,525 22,316 112,882 15,281,285 General and administration 473,232 - 377,290 - - - - 850,522 Insurance claims and premiums 4,202,916 15,034,098 - - - - - 19,237,014 Depreciation 1,869 -126,693 -3,261 -- 131,823

Total operating expenses 4,678,017 16,197,883 8,513,562 18,198 5,957,786 22,316 112,882 35,500,644

Operating Income (Loss) (1,932,138) 2,322,678 (290,464) (14,691) 973,365 (22,316) 50,769 1,087,203

Nonoperating Revenue (Expenses) Investment income 71,292 214,184 13,637 13,667 39,493 3,879 500 356,652 Interest expense - - (1,849) - (30,228) - - (32,077) (Loss) gain on sale of assets - -1,480 - (1,485) - - (5)

Total nonoperating revenues (expenses) 71,292 214,184 13,268 13,667 7,780 3,879 500 324,570

Income (Loss) - Before contributions and transfers (1,860,846) 2,536,862 (277,196) (1,024) 981,145 (18,437) 51,269 1,411,773

Transfers Out (25,425) (413,714) -- -- - (439,139)

Change in Net Position (1,886,271) 2,123,148 (277,196) (1,024) 981,145 (18,437) 51,269 972,634

Net Position - Beginning of year 3,551,329 8,985,861 2,750,819 751,994 1,323,038 225,134 - 17,588,175

Net Position - End of year $ 1,665,058 $ 11,109,009 $ 2,473,623 $ 750,970 $ 2,304,183 $ 206,697 $ 51,269 $ 18,560,809

227 City of South Bend, Indiana

Internal Service Funds Combining Statement of Cash Flows Year Ended December 31, 2018

Liability Innovation/ Insurance Self-Funded Technology/ Unemployment Premium Employee Central Police Take 311 Call Compensation Parental Reserve Benefits Services Home Vehicle Center Insurance Leave Total

Cash Flows from Operating Activities Receipts from customers and users$ 687,727 $ 3,822,678 $ 16,055 $ 3,507 -$ $ - -$ $ 4,529,967 Receipts from interfund services and reimbursements 2,068,956 14,686,228 8,201,853 - 6,936,412 - 163,651 32,057,100 Payments to suppliers (3,379,820) (16,202,343) (4,902,718) - (4,054,286) (20,481) - (28,559,648) Payments to employees (273,486) - (2,992,569) - (2,183,756) - (112,882) (5,562,693) Internal activity - Payments to other funds (111,076) - (419,165) (18,198) (4,019) -- (552,458) Net cash provided by (used in) operating activities (1,007,699) 2,306,563 (96,544) (14,691) 694,351 (20,481) 50,769 1,912,268

Cash Flows from Noncapital Financing Activities Transfers to other funds (25,425) (413,714) - - - - - (439,139) Net cash (used in) provided by noncapital financing activities (25,425) (413,714) - - - - - (439,139)

Cash Flows from Capital and Related Financing Activities Proceeds from capital debt issued for future capital purchase - - - - 1,138,025 - - 1,138,025 Proceeds from sales of capital assets - - 3,266 - - - - 3,266 Purchase of capital assets - - (8,905) - - - - (8,905) Principal paid on capital debt - - (13,273) - (210,285) - - (223,558) Interest paid on capital debt - - (1,899) - (27,552) -- (29,451) Net cash (used in) provided by capital and related financing activities - - (20,811) - 900,188 -- 879,377

Cash Flows from Investing Activities Interest received on investments 69,840 199,400 12,898 13,004 31,695 3,726 357 330,920 Proceeds from sale and maturities of investment securities 847,039 (951,980) 125,880 34,260 (1,836,308) 21,100 (34,037) (1,794,046) Net cash provided by (used in) investing activities 916,879 (752,580) 138,778 47,264 (1,804,613) 24,826 (33,680) (1,463,126)

Net (Decrease) Increase in Cash and Cash Equivalents (116,245) 1,140,269 21,423 32,573 (210,074) 4,345 17,089 889,380

Cash and Cash Equivalents - Beginning of year 1,351,931 2,893,341 370,203 217,746 1,589,083 65,353 - 6,487,657

Cash and Cash Equivalents - End of year $ 1,235,686 $ 4,033,610 $ 391,626 $ 250,319 $ 1,379,009 $ 69,698 $ 17,089 $ 7,377,037

228 City of South Bend, Indiana

Internal Service Funds Combining Statement of Cash Flows Year Ended December 31, 2018

Liability Innovation/ Insurance Self-Funded Technology/ Unemployment Premium Employee Central Police Take 311 Call Compensation Parental Statement of Net Position Classification of Cash Reserve Benefits Services Home Vehicle Center Insurance Leave Total and Cash Equivalents Cash and investments $ 3,696,778 $ 11,997,127 $ 1,171,621 $ 748,876 $ 2,758,297 $ 208,514 $ 51,126 $ 20,632,339 Restricted cash and investments - - - - 457,020 - - 457,020 Less amounts classified as investments (2,461,092) (7,963,517) (779,995) (498,557) (1,836,308) (138,816) (34,037) (13,712,322) Total cash and cash equivalents $ 1,235,686 $ 4,033,610 $ 391,626 $ 250,319 $ 1,379,009 $ 69,698 $ 17,089 $ 7,377,037

Reconciliation of Operating Income (Loss) to Net Cash from Operating Activities Operating income (loss) $ (1,932,138) $ 2,322,678 $ (290,464) $ (14,691) $ 973,365 $ (22,316) $ 50,769 $ 1,087,203 Adjustments to reconcile operating income (loss) to net cash from operating activities: Depreciation and amortization 1,869 - 126,693 - 3,261 - - 131,823 Changes in assets and liabilities: Receivables 10,804 (11,655) (5,608) - 2,502 - - (3,957) Due from other funds - - 418 - 2,760 - - 3,178 Inventory - - 21,549 - - - - 21,549 Prepaid expenses and other assets (19,633) - 3,762 - (312,573) - - (328,444) Accounts payable (30,293) 12,033 61,017 - 34,038 1,835 - 78,630 Due to other funds - (1,288) 65 - - - - (1,223) Accrued payroll payable 228 - 559 - 12,267 - - 13,054 Compensated absences payable (2,621) - (14,535) - (21,269) - - (38,425) Estimate of unfiled claims 964,085 (15,205) - - - - - 948,880 Net cash provided by (used in) operating activities $ (1,007,699) $ 2,306,563 $ (96,544) $ (14,691) $ 694,351 $ (20,481) $ 50,769 $ 1,912,268

Noncash Investing, Capital, and Financing Activities Capital assets disposed (at cost) -$ -$ $ (46,408) -$ $ (172,957) $ - -$ $ (219,365) Accumulated depreciation on disposals of capital assets - - 44,622 - 171,471 - - 216,093

229 City of South Bend, Indiana Other Supplemental Information Fiduciary Funds Fund Descriptions

Fiduciary Funds Descriptions

Pension Trust Funds 1925 Police Pension To account for the provision of retirement and disability benefits to police officers hired prior to May 1, 1977. Financing is provided by mandatory contributions by active members and state pension relief distributions.

1937 Firefighters' Pension To account for the provision of retirement and disability benefits to firefighters hired prior to May 1, 1977. Financing is provided by mandatory contributions by active members and state pension relief distributions.

Private Purpose Trust Funds City Cemetery Trust To account for cemetery maintenance under a trust arrangement financed by principal and income.

Bowman Cemetery Trust To account for the expenditures the City incurs in maintaining the Bowman Cemetery.

Agency Funds

Payroll To account for the payroll of City employees and pension benefits of the Police and Firefighters' Pension Funds. Gross payroll and pension benefits are treated as expenditures in other City funds and transferred into this fund, which serves as a clearing account.

Morris Palais Royale Box Office To account for Morris Performing Arts Center and Palais Royale event advance deposits and related expenses.

Police Distributions Payable To account for monies collected by the South Bend Police Department from asset seizures and other sources. Proceeds may be used to pay other governmental agencies for monies collected on their behalf or for related expenses.

230 City of South Bend, Indiana Statement of Fiduciary Net Position Fiduciary Funds December 31, 2018

Pension Trust Funds Private Purpose Trust Funds Agency Funds 1937 Total Morris Palais Police 1925 Police Firefighters' Pension City Bowman Royale Box Distribution Total Agency Pension Pension Trust Funds Cemetery Trust Cemetery Total Payroll Office Payable Funds Assets Cash and cash equivalents$ 316,056 $ 105,320 $ 421,376 $ 9,666 $ 152,051 $ 161,717 $ 324,526 $ 2,226,914 $ 838,526 $ 3,389,966 Investments 629,484 209,764 839,248 19,251 302,837 322,088 - - - - Receivables - Accounts 893 - 893 ------Receivables - Interest 2,928 1,085 4,013 81 1,272 1,353 -- - -

Total assets 949,361 316,169 1,265,530 28,998 456,160 485,158 324,526 2,226,914 838,526 3,389,966

Liabilities Accounts payable 176 245 421 ------Accrued liabilities and other - 372 372 - - - 324,526 - - 324,526 Customer deposits payable ------2,226,914 - 2,226,914 Police distribution payable ------838,526 838,526

Total liabilities 176 617 793 - - - $ 324,526 $ 2,226,914 $ 838,526 $ 3,389,966

Net Position for Pension Benefits and Other Purposes $ 949,185 $ 315,552 $ 1,264,737 $ 28,998 $ 456,160 $ 485,158

231 City of South Bend, Indiana Statement of Changes in Fiduciary Net Position Fiduciary Funds December 31, 2018

Pension Trust Funds Private Purpose Trust Funds 1925 Police 1937 Firefighters' City Bowman Pension Pension Total Cemetery Trust Cemetery Total Additions Investment income - Interest and dividends$ 15,219 $ 7,596 $ 22,815 $ 520 $ 162 $ 682 Contributions: On behalf 6,223,858 4,475,669 10,699,527 - - - Other 5,017 6,648 11,665 -31,207 31,207 Net contributions 6,228,875 4,482,317 10,711,192 -31,207 31,207

Total additions 6,244,094 4,489,913 10,734,007 520 31,369 31,889

Deductions Benefit payments 6,166,971 4,625,265 10,792,236 - - - Cemetery maintenance ------Interfund transfers - - - 424,791 (424,791) - Administrative expenses 13,254 15,354 28,608 -- -

Total deductions 6,180,225 4,640,619 10,820,844 424,791 (424,791) -

Net Increase (Decrease) in Net Position Held in Trust 63,869 (150,706) (86,837) (424,271) 456,160 31,889

Net Position - Beginning of year 885,316 466,258 1,351,574 453,269 -453,269

Net Position - End of year $ 949,185 $ 315,552 $ 1,264,737 $ 28,998 $ 456,160 $ 485,158

232 City of South Bend, Indiana Other Supplemental Information Schedule of Changes in Assets and Liabilities Agency Funds Year Ended December 31, 2018

Balance at Balance at December 31, January 1, 2018 Additions Reductions 2018 Payroll Assets - Cash and investments $ 433,998 $ 113,820,377 $ (113,929,849) $ 324,526 Liabilities - Accrued liabilities and other$ 433,998 $ 113,820,377 $ (113,929,849) $ 324,526

Balance at Balance at December 31, January 1, 2018 Additions Reductions 2018 Morris Palais Royale Box Office Assets - Cash and investments $ 2,446,226 $ 2,226,914 $ (2,446,226) $ 2,226,914 Liabilities - Customer deposits payable$ 2,446,226 $ 2,226,914 $ (2,446,226) $ 2,226,914

Balance at Balance at December 31, January 1, 2018 Additions Reductions 2018 Police Distribution Payable Assets - Cash and investments $ 841,894 $ 838,526 $ (841,894) $ 838,526 Liabilities - Police distribution payable$ 841,894 $ 838,526 $ (841,894) $ 838,526

233 Statistical Section

This part of the comprehensive annual financial report presents detailed information as context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.

The statistical section is organized into the following main categories:

Financial trends These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time.

Revenue capacity These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax.

Debt capacity These schedules present information to help the reader assess the affordability of the government's current level of outstanding debt and the government's ability to issue additional debt in the future.

Demographic and economic information These schedules help the reader understand the environment within which the government's financial activities take place.

Operating information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs.

234 Financial Trends

These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.

235 City of South Bend, Indiana Net Position by Component Last Ten Fiscal Years

As of December 31, 2009 2010 2011 2012 2013 2014 (1) 2015 (1) 2016 2017 2018 Governmental activities Net investment in capital assets $ 178,483,535 $ 186,771,216 $ 196,265,413 $ 202,779,954 $ 192,190,446 $ 168,275,521 $ 157,604,691 $ 161,341,318 $ 155,912,682 $ 143,282,487 Restricted 12,825,227 8,840,610 9,354,772 8,050,418 7,990,172 8,723,878 9,137,552 8,669,117 9,245,531 11,252,528 Unrestricted 82,877,695 96,539,932 82,271,482 71,992,457 86,413,227 (18,581,970) (25,882,348) (7,327,797) (16,751,916) 3,573,134 Total net position $ 274,186,457 $ 292,151,758 $ 287,891,667 $ 282,822,829 $ 286,593,845 $ 158,417,429 $ 140,859,895 $ 162,682,638 $ 148,406,297 $ 158,108,149 Business-type activities Net investment in capital assets $ 119,607,643 $ 122,108,095 $ 103,463,004 $ 113,193,929 $ 114,506,252 $ 136,685,811 $ 141,998,384 $ 145,288,974 $ 145,585,038 $ 145,963,344 Restricted 14,075,339 13,320,967 12,937,988 29,259,933 48,267,664 26,587,012 28,397,290 31,963,852 29,623,015 33,936,695 Unrestricted 12,597,138 19,262,192 45,733,630 26,957,505 7,906,258 22,426,017 24,415,739 25,357,665 28,103,338 30,785,421 Total net position $ 146,280,120 $ 154,691,254 $ 162,134,622 $ 169,411,367 $ 170,680,174 $ 185,698,840 $ 194,811,413 $ 202,610,491 $ 203,311,391 $ 210,685,460 Primary government Net investment in capital assets $ 298,091,178 $ 308,879,311 $ 299,728,417 $ 315,973,883 $ 306,696,698 $ 304,961,332 $ 299,603,075 $ 306,630,292 $ 301,497,720 $ 289,245,831 Restricted 26,900,566 22,161,577 22,292,760 37,310,351 56,257,836 35,310,890 37,534,842 40,632,969 $ 38,868,546 45,189,223 Unrestricted 95,474,833 115,802,124 128,005,112 98,949,962 94,319,485 3,844,047 (1,466,609) 18,029,868 $ 11,351,422 34,358,555 Total net position $ 420,466,577 $ 446,843,012 $ 450,026,289 $ 452,234,196 $ 457,274,019 $ 344,116,269 $ 335,671,308 $ 365,293,129 $ 351,717,688 $ 368,793,609

(1) The City implemented the reporting of net pension liability through GASB 68 during 2015. 2014 was restated.

Net position is defined as the difference between total assets and deferred outflows of resources less total liabilities and deferred inflows of resources and can generally be thought of as the net worth of the City of South Bend. Source - City of South Bend Comprehensive Annual Financial Reports (includes prior period adjustments)

236 City of South Bend, Indiana Changes in Net Position Last Ten Fiscal Years

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Expenses Governmental activities: General Government $ (7,903,378) $ (8,261,861) $ (16,783,351) $ (13,788,310) $ (13,200,898) $ (19,013,453) $ (21,572,776) $ (15,618,817) $ (16,750,853) $ (12,654,430) Public Safety (50,800,573) (62,106,991) (73,530,442) (69,977,237) (76,023,819) (68,783,155) (56,528,448) (55,029,909) (71,656,865) (69,209,163) Highways and Streets (15,042,344) (9,526,537) (7,574,003) (14,639,158) (20,915,815) (13,031,500) (20,045,444) (13,550,535) (21,716,658) (17,223,378) Health and Welfare ------Community and Economic Development (4,335,618) (30,744,012) (34,648,975) (20,217,987) (10,069,690) (19,780,791) (40,727,612) (28,436,368) (26,326,989) (33,801,755) Culture and Recreation (17,981,839) (16,036,194) (15,566,794) (21,724,589) (26,846,471) (16,802,311) (20,300,768) (17,156,094) (19,332,902) (26,076,331) Bond Issuance Costs ------(372,432) - - Interest on Long-Term Debt (8,049,610) (7,339,548) (6,798,531) (6,134,406) (5,961,124) (2,497,849) (4,762,714) (4,727,630) (4,538,530) (5,718,172) Total governmental activities expenses (104,113,362) (134,015,143) (154,902,096) (146,481,687) (153,017,817) (139,909,059) (164,310,194) (134,519,353) (160,322,797) (164,683,229) Business-type activities: Water (12,584,679) (12,525,246) (11,972,840) (12,228,014) (15,221,865) (13,020,610) (13,609,378) (14,900,039) (14,902,682) (14,788,847) Wastewater (27,047,143) (21,403,663) (22,260,005) (23,809,975) (26,390,790) (25,521,753) (25,737,867) (26,420,526) (32,548,087) (25,744,139) Century Center (3,488,266) (2,989,586) (3,100,484) (2,929,268) (4,330,656) (4,747,838) (4,854,747) (5,364,472) (5,121,336) (5,287,797) Consolidated Building Department (1) (1,113,867) (930,120) (871,299) (909,376) (1,131,815) (3,242,320) (3,552,347) (3,240,172) (3,704,963) (4,136,837) Parking Garage (1,471,960) (1,438,288) (1,467,646) (1,721,655) (1,285,056) (1,660,596) (2,139,182) (909,857) (1,177,363) (1,565,351) Solid Waste (4,036,001) (4,204,056) (4,962,157) (5,118,806) (5,091,588) (5,811,526) (5,243,972) (5,794,913) (5,169,128) (5,467,986) Blackthorn Golf Course (1,881,982) (1,995,556) (1,689,042) (1,841,998) (1,497,513) (1,874,962) (165,977) - - Emergency Medical Services (2) ------(6,596,206) (7,437,349) (8,617,050) (8,987,340) Total business-type activities net expenses (51,623,898) (45,486,515) (46,323,473) (48,559,092) (54,949,283) (55,879,605) (61,899,676) (64,067,328) (71,240,609) (65,978,297) Total primary government net position (155,737,260) (179,501,658) (201,225,569) (195,040,779) (207,967,100) (195,788,664) (226,209,870) (198,586,681) (231,563,406) (230,661,526)

Program revenue Governmental activities: Charges for services: General Government $ 6,855,830 $ 6,964,269 $ 1,165,018 $ 2,100,103 $ 1,939,865 $ 1,451,438 $ 1,188,531 $ 1,622,788 $ 1,118,328 $ 718,155 Public Safety 5,051,827 4,916,958 4,096,566 5,079,182 5,210,272 4,992,228 529,386 975,712 648,136 702,977 Highways and Streets 5,152 28,110 227,000 291,840 451,363 728,343 676,429 707,547 976,095 - Community and Economic Develop. 332,454 283,420 683,503 271,366 444,839 485,938 408,654 481,293 1,489,942 698,252 Culture and Recreation 5,063,896 4,995,049 4,681,536 5,224,543 5,112,019 3,815,920 3,726,359 4,383,977 4,308,699 4,356,659 Operating Grants and Contributions 12,199,444 29,467,573 32,091,246 24,937,596 21,466,622 3,203,805 2,813,481 2,644,272 11,828,681 26,248,738 Capital Grants and Contributions 780,137 1,472,233 2,328,468 2,468,120 1,867,213 - - - 1,000,000 4,100,000 Total governmental activities program revenues 30,288,740 48,127,612 45,273,337 40,372,750 36,492,193 14,677,672 9,342,840 10,815,589 21,369,881 36,824,781 Business-type activities: Charges for services: Water 14,151,289 14,194,442 14,080,592 15,409,171 15,102,462 14,373,176 14,204,285 15,091,372 15,290,203 17,183,460 Wastewater 25,012,163 26,001,156 29,407,263 30,657,698 32,474,743 34,009,117 36,638,804 39,061,562 38,794,212 39,931,429 Century Center 2,873,966 2,869,010 2,894,913 2,680,076 3,463,813 2,227,171 4,202,564 4,796,676 3,055,793 3,258,017 Consolidated Building Department 977,050 875,481 899,397 1,000,381 967,667 1,387,571 2,037,950 1,764,100 1,902,493 2,044,582 Parking Garage 1,070,519 1,047,784 1,071,078 921,044 968,868 1,017,218 968,417 996,197 1,264,706 1,323,524 Solid Waste 4,759,530 4,745,547 4,830,342 5,081,991 5,399,044 5,295,712 5,364,871 5,839,143 5,420,711 5,471,364 Blackthorn Golf Course 1,557,951 1,479,415 1,392,999 1,669,372 1,530,402 1,548,341 109,949 - - - Emergency Medical Services ------6,470,446 7,921,172 7,308,243 6,727,643 Operating Grants and Contributions ------278,112 Capital Grants and Contributions 4,038,412 1,889,165 4,291,731 2,010,253 697,916 95,834 4,683,424 649,609 1,170,970 - Total business-type activities program revenues 54,440,880 53,102,000 58,868,315 59,429,986 60,604,915 59,954,140 74,680,710 76,119,831 74,207,331 76,218,131 Total primary government program revenues 84,729,620 101,229,612 104,141,652 99,802,736 97,097,108 74,631,812 84,023,550 86,935,420 95,577,212 113,042,912

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net (Expense)/Revenue Governmental activities (103,726,403) (106,774,484) 45,273,337 (106,108,937) (116,525,624) (125,231,387) (154,967,354) (123,703,764) (138,952,916) (127,858,448) Business-type activities 8,954,365 6,778,527 58,868,315 10,870,894 5,655,632 4,074,535 12,781,034 12,052,503 2,966,722 10,239,834 Total primary government net expense (94,772,038) (99,995,957) 104,141,652 (95,238,043) (110,869,992) (121,156,852) (142,186,320) (111,651,261) (135,986,194) (117,618,614)

237 City of South Bend, Indiana Changes in Net Position (continued) Last Ten Fiscal Years

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General Revenue and Other Changes in Net Position Governmental activities: Taxes: Property taxes $ 73,882,128 $ 77,315,641 $ 76,445,349 $ 71,775,415 $ 72,018,650 $ 69,221,468 $ 72,032,049 $ 76,331,581 $ 78,266,107 $ 80,155,902 County Option Income Tax 10,270,179 11,502,052 13,219,723 13,748,824 13,739,325 15,025,840 14,847,338 21,194,795 17,579,628 20,210,633 Economic Develop. Income Tax 4,536,245 7,335,113 8,044,773 8,324,878 8,177,352 8,796,821 9,031,709 9,594,602 10,600,122 12,700,892 Professional Sports Develop. Tax 522,788 597,406 558,268 633,904 649,996 588,054 628,261 673,787 347,255 - Community Revitalization District Tax 605,623 416,149 733,100 653,185 244,623 - - - - - Hotel/motel Tax ------616,437 Unrestricted Grants and Contributions 7,597,883 4,883,081 3,964,336 3,891,810 5,893,924 28,473,888 25,487,112 25,846,397 17,160,034 4,819,125 Unrestricted Investment earnings 859,135 868,023 1,050,768 1,317,443 762,270 951,901 1,322,674 1,458,787 1,687,888 3,304,646 Other 2,781,368 2,627,341 3,483,054 6,623,313 14,285,314 6,747,199 11,214,442 6,745,542 8,731,916 10,523,004 Gain on sale of capital assets ------Net Pension Obligation ------Transfers (645,992) (648,823) 3,041,176 3,879,721 4,525,187 (683,049) 2,846,415 3,681,016 4,123,183 5,229,661 Total governmental activities 100,409,357 104,895,983 110,540,547 110,848,493 120,296,641 129,122,122 137,410,000 145,526,507 138,496,133 137,560,300 Business-type activities: Unrestricted Investment earnings 271,360 146,826 206,409 285,572 138,362 128,168 358,918 570,982 578,773 1,088,896 Other - - - - - 1,501,664 - - 1,278,588 1,275,000 Transfers 645,992 648,823 (3,041,176) (3,879,721) (4,525,187) 683,049 (2,846,415) (3,681,016) (4,123,183) (5,229,661) Total business-type activities 917,352 795,649 (2,834,767) (3,594,149) (4,386,825) 2,312,881 (2,487,497) (3,110,034) (2,265,822) (2,865,765) Total primary government 101,326,709 105,691,632 107,705,780 107,254,344 115,909,816 131,435,003 134,922,503 142,416,473 136,230,311 134,694,535 Special Item (Governmental activities): Well field contamination settlement ------Disposal of operations ------(1,180,964) - - Change in Net Position Governmental activities (6,365,127) 150,169,320 911,788 4,739,556 3,771,016 3,890,735 (17,557,354) 21,822,743 (456,783) 9,701,852 Business-type activities 7,695,879 59,663,964 9,710,075 7,276,745 1,268,807 6,387,416 9,112,573 7,799,078 700,900 7,374,069 Total primary government $ 1,330,752 $ 209,833,284 $ 10,621,863 $ 12,016,301 $ 5,039,823 $ 10,278,151 $ (8,444,781) $ 29,621,821 $ 244,117 $ 17,075,921

Excludes prior period adjustments

Changes in net assets is defined as the incremental difference between total assets and total liabilities as a result of operations during the fiscal year.

(1) In 2014, Code Enforcement and Animal Care & Control were consolidated with the Building Department to build efficiencies. Prior to 2014, these expenses were included in the general government activities.

(2) In 2015, Emergency Medical Services was reclassified to an enterprise fund.

Source : City of South Bend Comprehensive Annual Financial Reports

238 City of South Bend, Indiana Fund Balances - Governmental Funds Last Ten Fiscal Years

As of December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General fund Prior to adoption of GASB 54: Reserved$ 1,516,159 $ 1,824,454 $ - $ - $ - $ - $ - $ - $ - $ - Unreserved and undesignated 23,102,296 26,912,688 ------Subsequent to adoption of GASB 54: Nonspendable - - 1,115,025 958,341 656,848 558,304 491,665 494,730 447,003 425,680 Restricted - - 327,267 ------Committed ------Assigned - - 255,287 165,389 516,506 - 466,088 1,380,036 1,242,770 820,914 Unassigned - - 26,233,637 27,671,353 26,495,559 27,029,101 29,664,303 32,077,856 33,776,487 37,383,206 Total general fund 24,618,455 28,737,142 27,931,216 28,795,083 27,668,913 27,587,405 30,622,056 33,952,622 35,466,260 38,629,800 All other governmental funds: Prior to adoption of GASB 54: Reserved 56,819,802 62,230,229 ------Unreserved, reported in: Special revenue funds 36,398,024 31,996,398 ------Capital projects funds 78,214,132 85,237,947 ------Debt service funds ------Subsequent to adoption of GASB 54: ------Nonspendable - - 37,036,839 37,706,861 22,828,476 20,537,450 27,042,236 23,566,267 21,927,221 22,322 Restricted - - 44,754,037 78,326,567 95,387,879 100,501,274 113,004,506 101,826,640 125,302,667 152,809,121 Committed - - 11,829,074 11,142,045 20,697,026 12,962,745 2,238,475 2,698,694 2,392,685 3,209,500 Assigned - - 77,460,284 35,180,652 35,455,190 35,147,874 32,138,059 31,998,790 32,769,201 38,707,987 Unassigned - - (2,777,374) (4,219,066) (4,852,169) (5,700,829) (4,218,596) (2,301,793) (626,846) - Total all other governmental funds 171,431,958 179,464,574 168,302,860 158,137,059 169,516,402 163,448,514 170,204,680 157,788,598 181,764,928 194,748,930 Total of all governmental funds $ 196,050,413 $ 208,201,716 $ 196,234,076 $ 186,932,142 $ 197,185,315 $ 191,035,919 $ 200,826,736 $ 191,741,220 $ 217,231,188 $ 233,378,730

Source: City of South Bend Comprehensive Annual Financial Reports

239 City of South Bend, Indiana Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years

As of December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenue Taxes$ 89,139,585 $ 101,785,765 $ 99,001,213 $ 95,136,206 $ 94,829,947 $ 93,632,183 $ 96,033,296 $ 107,861,553 $ 106,746,367 $ 113,683,864 Licenses, fees and permits 206,594 192,397 190,943 189,714 177,019 141,565 151,923 224,677 231,260 245,956 Fines and forfeits 423,981 409,775 636,749 334,767 660,841 563,999 454,327 756,781 562,466 494,836 Charges for services 16,678,584 16,585,634 13,990,267 12,442,553 12,320,498 10,628,976 5,794,168 7,062,108 7,020,575 5,735,251 Intergovernmental 20,577,464 35,822,886 34,419,714 31,297,526 29,227,759 30,663,505 30,216,059 27,959,813 29,634,896 35,167,863 Investment earnings 859,135 868,023 1,050,768 1,317,443 762,270 955,376 1,253,242 1,624,527 1,687,888 3,304,646 Other revenues 3,046,791 2,677,796 3,587,518 6,660,875 13,174,140 7,904,187 8,816,811 7,179,959 9,703,304 10,523,004 Total revenue 130,932,134 158,342,276 152,877,172 147,379,084 151,152,474 144,489,791 142,719,826 152,669,418 155,586,756 169,155,420 Expenditures Current: General government 5,969,141 5,214,424 6,680,855 6,390,585 7,154,965 8,022,688 8,420,278 16,311,633 14,221,015 12,763,226 Public safety 48,790,068 62,586,177 69,612,754 67,138,414 64,041,549 66,927,250 61,889,405 64,350,281 72,010,182 75,530,051 Highways and streets 11,716,810 10,702,555 5,079,041 9,288,682 9,769,942 10,441,957 12,787,641 11,294,768 13,600,140 16,906,126 Public works ------Health & welfare 8,938,134 17,408,376 9,698,611 3,543,180 8,068,458 7,309,130 11,068,013 20,894,153 15,904,306 16,597,764 Community & economic development 12,733,094 12,841,596 13,816,699 18,557,986 13,956,025 13,948,089 12,855,704 13,070,606 20,622,330 22,179,273 Capital outlay 37,485,105 21,952,522 46,691,030 39,984,127 30,748,663 29,407,934 46,553,570 27,056,295 17,035,543 23,240,519 Bond Issuance Costs ------372,432 - - 165,885 Debt service interest 8,053,995 7,499,683 7,186,494 6,734,305 6,113,043 5,360,219 5,392,298 4,943,021 4,514,526 5,682,429 Debt service principal 9,276,363 12,552,681 13,632,195 10,822,721 13,008,105 12,882,830 13,319,392 13,055,327 16,634,195 13,134,725 Total expenditures 142,962,710 150,758,014 172,397,679 162,460,000 152,860,750 154,300,097 172,658,733 170,976,084 174,542,237 186,199,998 Excess of Revenue Over Expenditures (12,030,576) 7,584,262 (19,520,507) (15,080,916) (1,708,276) (9,810,306) (29,938,907) (18,306,666) (18,955,481) (17,044,578) Other Financing Sources (Uses) Proceeds from debt issuance 1,771,318 5,280,314 3,478,239 5,660,897 7,801,455 8,436,905 69,426,593 4,999,053 40,727,816 26,101,096 Premium (discount) on debt issuance 80,950 146,030 26,877 1,236,364 21,576 171,851 1,919,787 - 6,478 479,608 Proceeds from refunding 7,210,000 5,327,775 38,307,431 13,595,000 3,990,000 - - - - - Payments to refunded bond escrow age (7,591,171) (5,538,255) (37,300,856) (14,613,147) (4,376,769) (3,482,205) (35,698,815) - - - Transfers in 8,687,172 16,314,577 22,483,564 25,368,413 26,365,239 18,478,925 31,498,681 19,541,050 29,141,285 28,197,288 Transfers out (9,333,164) (16,963,400) (19,442,388) (21,488,692) (21,840,052) (16,522,289) (28,652,266) (15,860,034) (25,018,102) (22,528,488) Other - - - - - 28,476 1,235,744 541,081 (412,028) 942,616 Total other financing sources (uses) 825,105 4,567,041 7,552,867 9,758,835 11,961,449 7,111,663 39,729,724 9,221,150 44,445,449 33,192,120 Special Item Well field contamination settlement 4,462,214 ------Net change in fund balances $ (6,743,257) $ 12,151,303 $ (11,967,640) $ (5,322,081) $ 10,253,173 $ (2,698,643) $ 9,790,817 $ (9,085,516) $ 25,489,968 $ 16,147,542

Debt service as a percentage of noncapital expenditures 12.10% 17.59% 15.42% 13.84% 12.92% 13.38% 11.59% 12.74% 13.26% 10.11%

Excludes prior period adjustments (1) Formula = Debt service payments (principal and interest) / (Total Governmental Fund expenditures - Governmental Fund capital outlay per reconciliation) Source: City of South Bend Comprehensive Annual Financial Reports

240 City of South Bend, Indiana Financial Institutions Last Ten Years (Amounts in 000's)

Percent Banks Savings and Loans Credit Unions Increase/

Year Branches Deposits Branches Deposits Branches Deposits Total Deposits (Decrease)

2009 40 2,443,390 - - 23 2,914,347 5,357,737 26.21% 2010 40 3,108,702 - - n/a 2,410,711 5,519,413 3.02% 2011 39 3,342,964 - - n/a 2,474,034 5,816,998 5.39% 2012 40 3,201,888 - - n/a 2,735,212 5,937,100 2.06% 2013 37 3,730,018 - - n/a 2,854,527 6,584,545 10.91% 2014 39 2,548,101 - - n/a 2,911,596 5,459,697 -17.08% 2015 40 2,454,129 1 25,077 n/a 3,089,732 5,568,938 2.00% 2016 39 2,607,360 1 25,077 n/a 3,262,413 5,894,850 5.85% 2017 35 2,853,276 - - n/a 3,451,457 6,304,733 6.95% 2018 36 3,179,336 - - n/a 3,719,934 6,899,270 9.43%

Banks Credit Unions 1st Source Bank $ 1,784,833 56.15% Teacher's Credit Union $ 2,666,895 71.69% Key Bank 533,082 16.77% Notre Dame Federal Credit Union 525,171 14.12% Wells Fargo 291,200 9.16% Community Wide Credit Union 370,901 9.97% Others 570,221 17.94% AAA Federal Credit Union 53,969 1.45% Total $ 3,179,336 100.02% Policemen's Federal Credit Union 48,721 1.31% Others 54,277 1.46% Total $ 3,719,934 100.00% n/a - information is not available

Bank of America closed operations in South Bend prior to June 30, 2014 reducing total bank deposits.

Sources: Federal Deposit Insurance Corporation Website (www.fdic.gov). Research and Analysis: Summary of Deposits, Deposits Market Share Report, Indiana, St. Joseph County, South Bend, Run Report.

National Credit Union Association Website (www.ncua.gov). Custom Query, Search Fields, State = Indiana, Total Shares Greater than 1, City = South Bend or Notre Dame. Check data for CU name and total amount of shares and deposits.

241 Revenue Capacity

These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax, and other major revenue sources.

242 City of South Bend, Indiana Property Taxes Levies and Collections Last Ten Fiscal Years

Estimated Adjusted Current Tax Total Tax (1) Outstanding Per DLGF Circuit Breaker Current Tax Collections Delinquent Collections as Outstanding Delinquent Taxes Tax Year/ Current Levy Levy Current Tax as a Percent of Tax Total Tax a Percent of Delinquent as a Percent of Collection Year Tax Levy Reduction (County Abstract) Collections Adjusted Tax Levy Collections Collections Adjusted Tax Levy Taxes Adjusted Tax Levy

2008/2009 64,546,050 7,863,846 56,682,204 47,497,697 83.80% 3,355,161 50,852,858 89.72% 5,810,503 10.25% 2009/2010 66,929,179 14,346,110 52,583,069 41,813,442 79.52% 6,380,600 48,194,042 91.65% 10,026,236 19.07% 2010/2011 68,662,101 17,692,787 50,969,314 40,876,844 80.20% 5,791,920 46,668,764 91.56% 8,165,775 16.02% 2011/2012 70,756,844 23,965,911 46,790,933 42,598,817 91.04% 5,111,380 47,710,197 101.96% 9,550,891 20.41% 2012/2013 72,696,497 27,863,156 44,833,341 38,721,788 86.37% 5,200,000 43,921,788 97.97% 11,146,473 24.86% 2013/2014 73,981,565 27,051,751 46,929,814 41,370,637 88.15% 3,134,526 44,505,163 94.83% 8,745,941 18.64% 2014/2015 76,533,090 29,728,412 46,804,678 42,097,072 89.94% 3,168,597 45,265,669 96.71% 8,200,000 17.52% 2015/2016 78,503,658 29,601,193 48,902,465 43,806,020 89.58% 3,900,000 47,706,020 97.55% 7,468,597 15.27% 2016/2017 81,487,640 31,615,462 49,872,178 45,605,926 91.45% 3,432,704 49,038,630 98.33% 12,106,873 24.28% 2017/2018 85,426,389 33,910,221 51,516,168 43,171,113 83.80% 5,867,517 50,747,909 98.51% 12,106,873 23.50%

Data provided for General Fund, Parks & Recreation, Cumulative Capital Development, Fire Pension and Police Pension Funds. Excludes College Football Hall of Fame and Tax Increment Financing Funds. Delinquent tax collections are not broken out by individual taxing unit. A calculation of South Bend's share of delinquent taxes has been made based on proportionate tax rates. Total collections may exceed 100% of adjusted tax levy as prior year collections are not broken out separately by the St. Joseph County Auditor. (1) Outstanding Delinquent Taxes are reported in the aggregate as of the end of each year and are not cumulative. Estimated for 2017/2018. Source - St. Joseph County Auditor's Settlement Worksheets and Abstract. City of South Bend budget forms approved by the Department of Local Government Finance (DLGF).

243 City of South Bend, Indiana Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (Rate per $100 of Net Assessed Value)

City Direct Rates Overlapping Rates (3) Cumulative Tax Year/ General Parks/ Firefighters' Police Park Capital Total St. Joseph Schools Total Develop Overlappi Collection Year Fund Recreation Pension Pension Bond ment Direct County Districts Township Library Other (1) ng

2008/2009 1.9777 0.3656 0.0117 0.0189 - 0.0342 2.4081 0.5693 1.0297 0.0537 0.2257 0.1733 2.0517 2009/2010 (2) 2.2536 0.4401 - - - 0.0342 2.7279 0.5866 1.0728 0.0406 0.2657 0.1835 2.1492 2010/2011 2.4381 0.4818 - - - 0.0342 2.9541 0.5424 1.2211 0.0438 0.3027 0.1958 2.3058 2011/2012 2.4954 0.4957 - - - 0.0328 3.0239 0.6212 1.1931 0.0464 0.2941 0.1817 2.3365 2012/2013 2.5678 0.5102 - - - 0.0328 3.1108 0.6731 1.3493 0.0453 0.3227 0.1971 2.5875 2013/2014 2.7977 0.5608 - - - 0.0328 3.3913 0.7058 1.3577 0.0505 0.3309 0.1849 2.6298 2014/2015 2.8313 0.5676 - - - 0.0325 3.4314 0.6866 1.2940 0.0500 0.3207 0.2125 2.5638 2015/2016 2.8703 0.5754 - - - 0.0321 3.4778 0.6974 1.2682 0.0512 0.3549 0.2224 2.5941 2016/2017 2.8382 0.6473 - - - 0.0313 3.5168 0.6950 1.2049 - 0.3372 0.1822 2.4193 2017/2018 2.8267 0.6651 0.0293 0.0303 3.5514 0.6908 1.1685 - 0.3309 0.1907 2.3809

(1) Includes State of Indiana, Redevelopment Commission (Hall of Fame), South Bend Transportation and South Bend Regional Airport.

(2) Firefighters' Pension and Police Pension are no longer a tax burden for the City of South Bend as the State of Indiana has assumed responsibility for funding these program

(3) Information provided for Portage Township in the City of South Bend. Property tax rates applied to net assessed valuation. Property tax billings are also subject to "circuit breaker" property tax caps on grossed assessed valuation of 1% (homestead residential property), 2% (other residential/rental property), and 3% ( nonresidential real and personal property). Therefore, an increase in stated property tax rates will not result in higher property taxes paid for many taxpayers who have reached their cap.

Source: St. Joseph County Auditor's Office - Certified Tax Rate Schedules - Rates presented for Portage Township in South Bend

244 City of South Bend, Indiana Detail of Net Assessed Valuation (Assessment For the Year 2017 Payable in 2018)

South Bend South Bend South Bend South Bend South Bend South Bend Centre Twp Clay Twp German Twp Penn Twp Warren Twp Portage Twp Totals Percent Value of land $ 119,438,600 $ 29,366,600 $ 79,715,800 $ 17,403,700 $ 844,600 $ 404,190,905 $ 650,960,205 Value of improvements 479,223,30 0 123,699,000 441,857,900 98,734,300 23,155,00 0 2,632,971,680 3,799,641,180 Total value of real estate 598,661,90 0 153,065,600 521,573,700 116,138,00 0 23,999,60 0 3,037,162,585 4,450,601,385 Less: Mortgage, veterans, blind, age 65 & other exemptions (237,682,480) (36,172,444) (89,398,370) (33,587,558) - (963,974,966) (1,360,815,818) Tax-exempt property (49,342,130) (8,929,726) (30,290,820) (9,026,600) - (360,010,919) (457,600,195) Investment Deduction - - - - - (1,998,700) (1,998,700) Tax increment financing (56,466,819) (1,092,000) (260,097,538) - (23,999,600) (405,560,624) (747,216,581) Tax abatements (520,980) (26,497,466 ) (2,238,600) - (21,783,696) (51,040,742) Net value of real estate 254,649,491 106,871,430 115,289,506 71,285,242 - 1,283,833,680 1,831,929,349 75.81%

Gross personal property assessments 31,036,980 10,164,890 193,670,283 3,592,620 6,923,520 406,457,370 651,845,663 Less: Tax abatements: (1,479,720) - (19,240,910) - - (26,448,020) (47,168,650) Tax-exempt property (2,095,479) (159,420) (4,606,051) (2,104,030) - (87,360,460) (96,325,440) Investment deduction - - - - - (17,439,241) (17,439,241) Tax increment financing ------Net value of personal property 27,461,781 10,005,470 169,823,32 2 1,488,590 6,923,52 0 275,209,64 9 490,912,332 20.32%

Net value of utilities 8,981,10 0 4,040,290 11,708,12 0 1,202,260 231,270 67,452,500 93,615,540 3.87% Total net assessed valuation $ 291,092,37 2 $ 120,917,190 $ 296,820,948 $ 73,976,092 $ 7,154,79 0 $ 1,626,495,829 $ 2,416,457,221 100.00% Percentage of Total 12.05% 5.00% 12.28% 3.06% 0.30% 67.31% 100.00%

Summary: Personal Real Property Property/Utilities Total Percent

Total value $ 4,450,601,385 $ 745,461,203 $ 5,196,062,588 100.00% Deductions & exemptions (1,362,814,518) (17,439,241) (1,380,253,759) -26.56% Tax exempt property (457,600,195) (96,325,440) (553,925,635) -10.66% Tax increment financing (747,216,581) - (747,216,581) -14.38% Tax abatements (51,040,742) (47,168,650) (98,209,392) -1.89% Total net assessed valuation $ 1,831,929,349 $ 584,527,872 $ 2,416,457,221 46.51% Percent 75.81% 24.19% 100.00%

Source: St. Joseph County Auditor's Office - Information from the County Abstract prepared by the Indiana Department of Local Government Finance

245 City of South Bend, Indiana Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years

Gross Assessed Values Less: Total Net (2) Tax Year/ Real Personal Utilities Total Non-Taxed Taxable City Tax % Collection Year Property Property Property Value Property (1) Value Rate Taxable 2008/2009 4,698,989,240 592,538,950 95,891,770 5,387,419,960 2,718,532,541 2,668,887,419 2.4081 49.54% 2009/2010 4,368,497,000 604,951,450 98,433,750 5,071,882,200 2,618,376,627 2,453,505,573 2.7279 48.37% 2010/2011 4,339,037,300 551,819,290 101,009,760 4,991,866,350 2,667,414,488 2,324,451,862 2.9541 46.56% 2011/2012 4,255,238,900 560,331,660 95,165,650 4,910,736,210 2,529,861,602 2,380,874,608 3.0239 48.48% 2012/2013 4,452,887,970 537,500,490 100,832,450 5,091,220,910 2,720,133,213 2,371,087,697 3.1108 46.57% 2013/2014 4,199,757,500 552,872,520 90,252,180 4,842,882,200 2,633,155,528 2,209,726,672 3.3913 45.63% 2014/2015 4,192,804,920 557,759,982 86,924,710 4,837,489,612 2,577,220,294 2,260,269,318 3.4314 46.72% 2015/2016 4,199,285,400 603,870,040 83,786,930 4,886,942,370 2,609,772,627 2,277,169,743 3.4778 46.60% 2016/2017 4,317,332,400 638,702,010 105,036,200 5,061,070,610 2,733,570,369 2,327,500,241 3.5168 45.99% 2017/2018 4,450,601,385 651,845,663 93,615,540 5,196,062,588 2,779,605,367 2,416,457,221 3.5168 46.51%

(1) Non-taxed property includes tax exempt property, tax increment financing property, tax abatements, and adjustments for deductions and exemptions.

(2) City tax rate excludes Redevelopment Commission (Hall of Fame) tax rate.

Source: St. Joseph County Auditor's Office

246 City of South Bend, Indiana Net Assessed Value of Taxable Property Last Ten Fiscal Years

Real Estate Personal Utilities Total Tax Year/ Net Assessed Net Assessed Net Assessed Net Assessed Percent Collection Year Value Value Value Value Change 2008/2009 2,137,129,242 435,866,407 95,891,770 2,668,887,419 -10.32% 2009/2010 1,911,818,036 443,253,787 98,433,750 2,453,505,573 -8.07% 2010/2011 1,809,523,734 413,918,368 101,009,760 2,324,451,862 -5.26% 2011/2012 1,858,836,588 426,872,370 95,165,650 2,380,874,608 2.43% 2012/2013 1,858,213,181 412,042,066 100,832,450 2,371,087,697 -0.41% 2013/2014 1,687,672,152 431,802,340 90,252,180 2,209,726,672 -6.81% 2014/2015 1,753,122,893 420,221,715 86,924,710 2,260,269,318 2.29% 2015/2016 1,737,036,616 456,346,197 83,786,930 2,277,169,743 0.75% 2016/2017 1,758,787,301 463,676,740 105,036,200 2,327,500,241 2.21% 2017/2018 1,831,929,349 490,912,332 93,615,540 2,416,457,221 6.12%

Source: St. Joseph County Auditor's office

247 City of South Bend, Indiana Assessed Value of Taxable Property Last Ten Fiscal Years

Net Tax Year/ Total Tax Exempt Tax Increment Tax Assessed Collection Year Gross Valuation Deductions (1) Property Financing Abatements Valuation

2008/2009 5,387,419,960 (1,557,329,781) (436,861,027) (625,910,065) (98,431,668) 2,668,887,419 2009/2010 5,071,882,200 (1,344,563,829) (449,848,037) (707,096,696) (116,868,065) 2,453,505,573 2010/2011 4,991,866,350 (1,353,769,271) (439,343,852) (777,038,302) (97,263,063) 2,324,451,862 2011/2012 4,910,736,210 (1,331,068,608) (417,907,225) (702,724,247) (78,161,522) 2,380,874,608 2012/2013 5,091,220,910 (1,397,134,910) (488,961,977) (761,349,489) (72,686,837) 2,371,087,697 2013/2014 4,842,882,200 (1,344,702,776) (512,692,590) (713,448,152) (62,312,010) 2,209,726,672 2014/2015 4,837,489,612 (1,292,923,103) (510,555,188) (707,010,507) (66,731,496) 2,260,269,318 2015/2016 4,886,942,370 (1,305,921,190) (521,555,123) (718,066,149) (64,230,165) 2,277,169,743 2016/2017 5,061,070,610 (1,334,844,637) (559,770,989) (743,657,399) (95,297,344) 2,327,500,241 2017/2018 5,196,062,588 (1,380,253,759) (553,925,635) (747,216,581) (98,209,392) 2,416,457,221

(1) Includes homestead standard deduction, supplemental standard deduction, mortgage deduction, blind/disabled deduction, investment deduction, veteran's deduction, over 65 years old deduction, and geothermal deduction. In 2009, a new 35% supplemental standard deduction was provided as a part of "circuit breaker" property tax reform legislation.

2017 Deductions 2015/2016 2016/2017 2017/2018 Homestead Standard Deduction $ 820,420,116 $ 828,638,094 $ 842,461,563 Supplemental Standard Deduction 375,610,821 400,306,547 435,967,478 Mortgage Deduction 42,985,922 40,717,260 40,183,948 Veteran's Deduction 11,784,608 11,986,495 12,815,878 Age 65 and Over Deduction 24,608,600 23,876,138 23,373,704 Energy Systems Deduction 388,200 396,600 421,500 Blind & Disabled Deduction 5,643,351 5,646,155 5,567,847 Fertilizer/Peticide Deduction - 114,555 Heritage Barn Deduction - 10,000 23,900 Investment Deduction 24,479,572 23,152,793 19,437,941

Total $ 1,305,921,190 $ 1,334,844,637 $ 1,380,253,759

Source: St. Joseph County Auditor's Office Abstract

248 City of South Bend, Indiana Property Tax Collections - Cash Basis Last Ten Fiscal Years

Fund 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Fund Name Number Actual (3) Actual Actual Actual Actual Actual Actual Actual Actual Actual

General Fund 101$ 79,162,937 $ 38,780,847 $ 38,514,550 $ 39,368,431 $36,251,397 $36,708,989 $37,349,387 $39,362,139 $39,568,076 $ 40,719,333 Excess Levy 103 - - - - - 3,648 - - - Parks & Recreation 201 13,919,096 7,591,932 7,613,760 7,824,056 7,207,060 7,365,388 7,487,554 7,902,995 9,033,731 9,591,899 Redevelopment Bonds Studebaker Corridor 310 ------Park Bond (2017ParksBond Debt Service) 312 703,118 College Football Hall of Fame Debt Service 313 2,362,057 1,488,453 1,549,954 1,133,205 1,268,179 497,768 906,263 1,361,512 820,071 426,604 River West TIF District (1) 324 10,808,912 21,508,430 11,187,768 11,631,287 13,340,354 14,284,734 16,293,240 18,159,311 17,259,902 18,662,835 Cumulative Capital Development 406 1,420,833 587,063 540,454 517,710 463,331 430,786 428,727 440,887 436,823 436,677 South Bend Central Development Area TIF (1) 420 3,870,188 7,336,117 3,633,473 3,671,478 2,590,808 4,309,727 - - - West Washington Street TIF District 422 358,844 860,049 431,085 422,715 493,608 580,987 402,911 453,503 378,994 332,220 Central Medical Service Area TIF District (1) 426 919,174 3,524,962 1,704,238 1,606,915 1,221,676 851,211 - - - River East (Northeast) TIF District 429 22,191 195,400 715,063 1,351,048 841,627 1,568,240 2,421,308 2,348,608 2,630,887 3,512,606 Southside Development Area TIF District 430 355,596 4,094,135 1,808,952 2,466,203 2,404,416 2,379,212 2,205,822 2,401,252 2,365,692 2,166,637 Erskine Commons TIF District (5) 431 1,240,184 5,978,592 784,373 ------Erskine Village TIF District 432 1,531,403 3,759,287 1,603,182 - 1,311,129 9,175 19,183 - - Douglas Road TIF District 435 125,294 460,760 306,053 285,713 323,939 321,895 270,758 345,262 379,255 River East (Northeast) Residential TIF 436 - 1,815,829 2,446,103 2,514,048 2,262,765 2,725,909 3,129,681 3,932,947 4,262,917 4,236,865 Airport Urban Enterprise 454 - 301,430 123,165 111,721 - - - - - Fire Department Employees Pension (4) 701 1,437,539 (5,867) ------Police Department Employees Pension (4) 702 1,609,905 ( 9,479) ------Total $ 119,144,153 $ 98,267,940 $ 72,962,173 $72,904,530 $69,980,289 $72,037,669 $70,914,834 $76,708,415 $77,136,348 $ 80,788,794

(1) Name changed in 2015 from TIF Airport to River West TIF due to consolidation of Central Development Area and Central Medical TIFs. (2) Delays in sending out property tax bills until December 19, 2008 (with an on-time due date of February 20, 2009) resulted in interfund borrowing in the General Fund (101), Parks and Recreation Fund (201) and the College Football Hall of Fame Debt Service Fund (313) at year end. The remainder of property tax revenue was received during the first half of 2009 with final settlement with the St. Joseph County Auditor in July, 2009 (3) Includes collections of 2008 taxes as noted above. Tax Increment Financing (TIF) 2009 property tax collections were received from the County Auditor on January 21, 2010. (4) Property tax levy for Police and Fire pension plans eliminated. Funding provided by the State of Indiana. (5) Erskine Commons TIF District funds were released and outstanding bonds were paid off.

Source - City of South Bend Accounting Records

249 City of South Bend, Indiana 2018 Circuit Breaker Property Tax Cap Credits December 31, 2018 (2%) (3%) Taxing (1%) Other Residential All Other Total Unit Name Homsesteads and Farmland Real/Personal Elderly Credits City of South Bend (101,168 population) South Bend Civil City$ 8,986,817 $ 13,491,772 $ 11,391,917 39,714$ $ 33,910,220 TIF - SB So. #1 Centre 1,525 39,063 1,037,873 4 1,078,465 TIF - Douglas Road EDA - - - - - TIF - River East Clay - - - - - TIF - River West German 993 370,895 4,528,640 - 4,900,528 TIF - SB West Washington 2,265 11,226 156,748 2 170,241 TIF - SB So. #1 Portage 20,487 345,351 1,245,678 1,005 1,612,521 TIF - River West Portage 1,240 1,119,963 2,613,244 30 3,734,477 TIF - River West Warren - - 466,653 - 466,653 TIF - River East Portage 1,363 3,165,116 679,367 - 3,845,846 Total Credits $ 9,014,690 $ 18,543,386 $ 22,120,120 40,755$ $ 49,718,951

Per Capita Credits 89.11 183.29 218.65 0.40 491.45 Percent of Total 18.13% 37.30% 44.49% 0.08% 100.00%

Selected Benchmark Local Governments: Total 2010 Per Capita Local Unit Credits Population Credits South Bend Civil City $ 33,910,221 101,168 $ 335 Anderson Civil City 12,482,782 56,120 222 East Chicago Civil City 4,368,987 29,698 147 Elkhart Civil City 10,416,671 50,949 204 Evansville Civil City 13,024,809 117,429 111 Fort Wayne Civil City 19,107,625 253,691 75 Gary Civil City 41,638,777 80,294 519 Goshen Civil City 3,769,447 31,719 119 Hammond Civil City 11,199,475 80,830 139 Jeffersonville Civil City 4,032,390 44,953 90 Kokomo Civil City 10,527,131 45,468 232 Lafayette Civil City 2,165,737 61,140 35 LaPorte Civil City 2,547,834 22,053 116 Mishawka Civil City 5,427,804 48,252 112 Muncie Civil City 16,243,724 70,085 232 Noblesville Civil City 3,635,554 51,969 70 Saint Joseph County 8,439,187 266,931 32 South Bend School Corporation 6,977,998 101,168 69 Terre Haute Civil City 11,710,916 60,785 193

Notes: Circuit breaker tax cap credits are tax savings for taxpayers and revenue losses for local governmental units. Circuit breaker credits are highest in tax districts with the highest tax rates. These are usually districts that include cities or towns because the municipal tax rate is included in the district tax rate. This means that most circuit breaker credits are in cities and towns and in units that overlap cities and towns.

Sources - Circuit Breaker Report. Prepared by the Legislative Services Agency, December 20, 2018 (www.iga.in.gov). County Property Tax Studies, Saint Joseph County, Property Tax Changes in Saint Joseph County between 2015 and 2016. Prepared by the Legislative Services Agency, October 2018. (www.iga.in.gov). U.S. Census Bureau, 2010 Census information (http://factfinder.census.gov/).

250 City of South Bend, Indiana Principal Property Taxpayers - Current and Nine Years Ago December 31, 2018

2018 2009 Net Assessed Percent Net Assessed Percent Taxpayer Type of Business Value (1) Rank of Total Value (2) Rank of Total University of Notre Dame Higher Education $ 43,277,785 1 1.79% Indiana Michigan Power Company - AEP Utility 41,328,450 2 1.71% 25,288,400 7 0.95% Edward Rose of Indiana Apartments and Real Estate 35,532,900 3 1.47% 75,137,200 2 2.82% Honeywell International, Inc. Airplane and Auto Parts 28,601,739 4 1.18% Federal-Mogul Powertrain Systems Automotive Parts 25,425,870 5 1.05% Noble Americas South Bend Ethanol LLC Ethanol Plant 20,195,680 6 0.84% NIPSCO Utility 19,764,470 7 0.82% US Bank National Association Banking 19,152,900 8 0.79% Comcast Telecommunications 17,625,810 9 0.73% Indiana Bell - AT&T Inc. Telecommunications 17,488,870 10 0.72% 8,249,100 10 0.31% Memorial Health System Health Care - 86,638,050 1 3.25% Wal Mart Retail Store - 62,991,000 3 2.36% Meijer Retail Store - 42,931,200 4 1.61% Park Jefferson Realty, LLC Apartments and Real Estate - 32,950,000 5 1.23% Castle Point Apartments Apartments and Real Estate - 26,070,600 6 0.98% 1st Source Bank Financial Institution - 22,311,475 8 0.84% Maple Lane Apartments Apartments and Real Estate - 15,033,500 9 0.56% Total Net Assessed Value - Ten Largest Taxpayers $ 268,394,474 11.11% $ 397,600,525 14.90%

Total Net Assessed Value (3)$ 2,416,457,221 100.00% $ 2,668,887,419 100.00%

Source: (1) Crowe Horwath LLP (2) 2009 Comprehensive Annual Financial Report (3) St. Joseph County Auditor (3) St. Joseph County Auditor

251 City of South Bend, Indiana Local Income Tax Revenue Last Ten Years

Total Est South Bend South Bend Actual City Distribution EDIT (1) County EDIT Rate of EDIT Rate of as a Percent Collections Year Tax Rate Collections Growth Distribution Growth of Total During Year 2009 0.20% 11,938,605 7.20% 4,612,694 15.38% 38.64% 3,843,912 2010 (2) 0.40% 22,789,919 90.89% 8,321,633 80.41% 36.51% 9,090,415 2011 (3) 0.40% 18,826,685 -17.39% 7,300,866 -12.27% 38.78% 7,300,866 2012 (4) 0.40% 17,649,256 -6.25% 8,324,626 14.02% 47.17% 9,068,785 2013 0.40% 20,611,415 16.78% 8,177,352 -1.77% 39.67% 8,177,352 2014 0.40% 22,063,091 7.04% 8,796,821 7.58% 39.87% 8,796,821 2015 0.40% 23,081,049 4.61% 9,181,206 4.37% 39.78% 9,181,206 2016 0.40% 23,733,626 2.83% 9,594,602 4.50% 40.43% 9,594,602 2017 0.40% 26,149,949 10.18% 10,600,122 10.48% 40.54% 10,600,122 2018 (5) 0.40% 26,745,547 2.28% 11,885,489 12.13% 44.44% 11,885,489 Total $ 213,589,142 $ 86,795,411 40.64% $ 87,539,570

(1) This tax was first enacted as of July 1, 1995 at the rate of 0.1% of City residents' adjusted gross income. The rate was increased to 0.2% effective July 1, 1997.

(2) The CEDIT tax rate for 2010 and subsequent years was increased by City of South Bend Common Council and the Saint Joseph County Common Council.

(3) In 2011, the State of Indiana underpaid due to an accounting error.

(4) The City's 2012 CEDIT distribution included $744,159, the amount the State of Indiana underpaid the City in 2011.

(5) The City's 2018 CEDIT distribution included $1,164,530 of Supplemental and One Time distributions.

Source - State of Department of Local Government Finance CEDIT Distribution Reports City of South Bend Accounting Records

252 City of South Bend, Indiana Local Income Tax Revenue Last Ten Years

County Option Income Tax (COIT) Revenue Total South Bend South Bend Actual City Distribution COIT County COIT Rate of COIT Rate of as a Percent Collections Year Tax Rate (1) Distributions Growth Distribution Growth of Total During Year 2009 0.60% 26,973,887 30.37%$ 8,952,424 40.27% 33.19% 8,302,694 2010 0.60% 25,147,806 -6.77% 7,855,776 -12.25% 31.24% 7,648,824 2011 (2) 0.60% 19,907,430 -20.84% 6,458,586 -17.79% 32.44% 7,097,462 2012 (3) 0.60% 22,536,457 13.21% 7,691,991 19.10% 34.13% 8,610,742 2013 0.60% 22,923,958 1.72% 7,846,939 2.01% 34.23% 7,846,939 2014 0.60% 25,275,541 10.26% 8,645,811 10.18% 34.21% 8,645,811 2015 0.60% 26,435,155 4.59% 8,859,912 2.48% 33.52% 8,859,912 2016 0.60% 27,898,910 5.54% 9,454,023 6.71% 33.89% 9,454,023 2017 0.60% 31,321,416 12.27% 10,459,265 10.63% 33.39% 10,459,265 2018 (4) 0.60% 31,947,819 2.00% 12,188,922 16.54% 38.15% 12,188,922

Total $ 260,368,379 $88,413,649 33.96% $ 89,114,594

(1) This tax was first enacted as of July 1, 1997 at the rate of 0.2% of City residents' adjusted gross income. The COIT rate increased 0.1% each year until it reached 0.6% as of July 1, 2001. The above collections/distribution amounts are net of the additional homestead credits that accompanied the passage of this income tax.

(2) In 2011, the State of Indiana underpaid due to an accounting error.

(3) The City's 2012 COIT distribution included $918,751, the amount the State of Indiana underpaid the City in 2011.

(4) The City's 2018 COIT distribution included Supplemental and One Distributions totaling $1,433,440.

Source - State of Indiana Department of Local Government Finance COIT Distribution Reports City of South Bend Accounting Records

253 City of South Bend, Indiana Local Income Tax Revenue Last Ten Years

Public Safety Local Option Income Tax (PS LOIT) Revenue

Total South Bend South Bend Actual City Distribution PS LOIT County LOIT Rate of LOIT Rate of as a Percent Collections Year Tax Rate Distributions Growth Distribution Growth of Total During Year

2010 (1) 0.25%$ 13,846,267 100.00%$ 6,078,454 100.00% 43.90%$ 6,078,454 2011 (2) 0.25% 11,371,882 -17.87% 5,293,619 -12.91% 46.55% 5,293,619 2012 (3) 0.25% 10,644,975 -6.39% 6,056,334 14.41% 56.89% 6,605,601 2013 0.25% 12,457,864 17.03% 5,892,356 -2.71% 47.30% 5,892,386 2014 0.25% 13,476,753 8.18% 6,380,029 8.28% 47.34% 6,380,029 2015 0.25% 13,734,382 1.91% 6,466,190 1.35% 47.08% 6,466,190 2016 0.25% 14,237,777 3.67% 6,791,160 5.03% 47.70% 6,791,160 2017 0.25% 15,673,247 10.08% 7,467,618 9.96% 47.65% 7,467,618

2018 (4) 0.25% 15,986,699 2.00% 8,487,336 13.66% 53.09% 8,487,336 Total $ 121,429,846 $58,913,096 48.52% $ 59,462,393

(1) This tax was effective in October 2009 at the rate of 0.25% of City residents' adjusted gross income. The measure is being used to support the Public Safety operations consisting of the Police Department and the Fire Department, to keep the staffing levels at their full complement.

(2) In 2011, the State of Indiana underpaid due to an accounting error.

(3) The City's 2012 PS LOIT distribution included $549,267, the amount the State of Indiana underpaid the City in 2011.

(4) The City's 2018 LOIT distribution included Supplemental and One Time distributions of $857,797.

Source - State of Indiana Department of Local Government Finance LOIT Public Safety Distribution Reports City of South Bend Accounting Records

254 City of South Bend, Indiana Total County Income Tax Distributions by Taxing Unit Last Ten Years

Unit of Government 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total County Certified Distribution $34,801,729 $ 33,231,041 $ 27,292,516 $ 29,898,874 $ 29,898,874 $ 32,344,207 $ 32,962,518 $ 34,170,664 $ 37,640,869 $ 38,393,656 Less: Homestead Credit (1) (7,827,842) (8,083,235) (7,385,086) (7,362,417) (6,974,918) (7,068,666) (6,527,363) (6,271,754) (6,319,453) (6,445,837) Total Distributive Shares $26,973,887 $25,147,806 $ 19,907,430 $22,536,457 $22,923,956 $25,275,541 $26,435,155 $27,898,910 $31,321,416 $31,947,819 Distributive Shares/Total County Distribution 77.51% 75.68% 72.94% 75.38% 76.67% 78.15% 80.20% 81.65% 83.21% 83.21%

Amount St. Joseph County$ 10,358,300 $ 9,819,576 $ 7,383,180 $ 7,986,750 $ 8,460,192 $ 9,314,201 $ 9,611,416 $ 9,983,016 $ 10,908,099 11,290,728 Townships 1,180,913 1,168,352 1,054,827 1,244,481 954,332 1,069,408 1,541,211 1,695,662 2,396,851 1,978,069 City of South Bend - Civil City 8,748,506 7,677,730 6,304,224 7,511,976 7,711,609 8,483,839 8,754,940 9,275,956 10,267,284 10,781,364 City of South Bend - Redevelopment 203,918 178,046 154,363 184,790 135,330 161,972 104,972 178,067 191,981 124,929 Other Cities & Towns 3,592,330 3,462,786 2,667,400 3,077,335 3,137,086 3,378,481 3,508,422 3,683,131 4,118,009 4,317,405 Libraries 2,007,809 2,042,942 1,762,365 1,879,376 1,849,933 2,126,185 2,144,046 2,279,241 2,541,672 2,569,360 Special Districts 882,111 798,374 581,071 651,749 675,474 741,455 770,148 803,837 897,520 885,964 Total $26,973,887 $25,147,806 $ 19,907,430 $22,536,457 $22,923,956 $25,275,541 $26,435,155 $27,898,910 $31,321,416 $31,947,819 Percentage of Distribution St. Joseph County 38.40% 39.05% 37.09% 35.44% 36.91% 36.85% 36.36% 35.78% 34.83% 35.34% Townships 4.38% 4.65% 5.30% 5.52% 4.16% 4.23% 5.83% 6.08% 7.65% 6.19% City of South Bend - Civil City 32.43% 30.53% 31.67% 33.33% 33.64% 33.57% 33.12% 33.25% 32.78% 33.75% City of South Bend - Redevelopment 0.76% 0.71% 0.78% 0.82% 0.59% 0.64% 0.40% 0.64% 0.61% 0.39% Other Cities & Towns 13.32% 13.77% 13.40% 13.65% 13.68% 13.37% 13.27% 13.20% 13.15% 13.51% Libraries 7.44% 8.12% 8.85% 8.34% 8.07% 8.41% 8.11% 8.17% 8.11% 8.04% Special Districts 3.27% 3.17% 2.91% 2.90% 2.95% 2.93% 2.91% 2.88% 2.87% 2.77%

Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

(1) A portion of the county option income tax is used for property tax relief through homestead credits for residential property owners.

Source - State of Indiana Department of Local Government Finance COIT Distribution Reports

255 City of South Bend, Indiana Ten Largest Water Customers December 31, 2018

Percentage of Total Water 2018 Operating Usage Name Revenue Revenue CCF* South Bend Community School Corporation 153,725 0.92% 99,555 Memorial Hospital of South Bend 121,561 0.72% 87,523 Irish Hills Apartments 111,845 0.67% 80,481 South Bend Parks Department 86,245 0.51% 61,819 Indiana University South Bend 80,673 0.48% 46,685 Honeywell Aerospace Company 73,525 0.44% 39,187 Indian Springs Apartments and Townhomes 70,679 0.42% 46,279 Housing Authority of South Bend 66,280 0.40% 34,843 St Joseph County Maintenance Department 56,162 0.33% 56,207 Holy Cross Care Services 43,519 0.26% 35,615

Total of Ten Largest Water Customers $ 864,214 5.15%

Total for Operating Revenue for Water Works $ 16,775,158 100.00%

*Hundreds of Cubic Feet

Source: City of South Bend Water Utility

256 City of South Bend, Indiana Ten Largest Sewage Works Customers December 31, 2018

Percentage of Heavy Total Water Metered Demand 2018 Sewer Usage Name Revenue Surcharge Revenue Revenue CCF* I/NTEK Plant $ 2,115,130 $ - $ 2,115,130 5.21% 734,505 University of Notre Dame 1,321,988 - 1,321,988 3.25% 525,074 Noble Americas South Bend Ethenol 710,257 - 710,257 1.75% 224,354 Memorial Hospital 389,610 - 389,610 0.96% 74,857 South Bend Community School Corp 371,912 - 371,912 0.92% 65,540 Honeywell Aerospace Co 245,749 - 245,749 0.61% 37,130 Irish Hills Apartments 242,538 - 242,538 0.60% 59,696 Indian Springs Apartments and Townhomes 226,426 - 226,426 0.56% 39,638 Town of New Carlisle 226,224 - 226,224 0.56% 64,637 Indiana University South Bend 210,559 - 210,559 0.52% 30,677

Total of Ten Largest Sewer Customers $ 6,060,393 $ -$ 6,060,393 14.92%

Total Operating Revenue for Wastewater $ 40,616,333

*Hundreds of Cubic Feet

Source: City of South Bend Sewage Works Utility

257 City of South Bend, Indiana Gasoline Tax Collections - Cash Basis Last Ten Fiscal Years December 31, 2018

LR&S MVH Total Gas % Year Fund Fund Tax Change 2009 1,045,477 2,954,086 3,999,563 -2.93% 2010 1,064,149 2,922,165 3,986,314 -0.33% 2011 1,030,958 2,951,072 3,982,030 -0.11% 2012 1,022,508 2,786,592 3,809,100 -4.34% 2013 1,001,871 3,006,122 4,007,993 5.22% 2014 1,017,383 3,682,329 4,699,712 17.26% 2015 1,045,516 3,679,371 4,724,887 0.54% 2016 1,046,446 3,640,561 4,687,007 -0.80% 2017 1,334,565 3,829,167 5,163,732 10.17% 2018 1,827,580 4,717,972 6,545,552 26.76%

Distributions of gas tax revenue are made monthly by the Indiana Department of Revenue to the Local Road and Street (LR&S) and Motor Vehicle Highway (MVH) funds for use in construction and maintenance of streets and highways. Distributions are based on a complex formula developed by the State of Indiana. The formula takes into account population, road and street mileage and other factors. Gas tax revenue was declining in prior years due to the economy and more fuel efficient vehicles, however, due to an improvement in the economy and temporary increase in state funding for two years, total gas tax increased in 2014. Gas tax remained consistent in 2016. Legislation passed by the Indiana General Assembly in 2017 to increase gas tax caused large increase seen in 2018. Source: City Accounting Records Gasoline Tax $7,000,000 $6,000,000 $5,000,000 LR&S $4,000,000 Fund $3,000,000 MVH Fund $2,000,000 Total $1,000,000 Gas Tax $0

258 City of South Bend, Indiana Wheel and Excise Surtax Collections (Cash Basis) Last Ten Years

2018 % Year Wheel Tax Change

2009 1,893,982 -7.19% 2010 1,975,397 4.30% 2011 1,863,283 -5.68% 2012 1,795,538 -3.64% 2013 2,045,213 13.91% 2014 1,637,707 -19.92% 2015 2,135,441 30.39% 2016 2,006,547 -6.04% 2017 2,211,731 10.23% 2018 2,152,758 -2.67%

Effective January 1, 2004, St. Joseph County enacted a wheel tax and annual license excise surtax as allowed by Indiana State law to provide additional funding for road maintenance and repair. Indiana State law allows an annual wheel tax of $5-40 per vehicle and an annual license excise surtax of 2-10%. St. Joseph County has enacted a $25 County Excise surtax. The tax applies to all passenger cars, trucks less than 11,000 pounds, buses, tractors and motorcycles registered in the County. (Other rates apply to recreational vehicles, semitrailers and trucks exceeding 11,000 pounds.) The tax is collected by the Indiana Bureau of Motor Vehicles, remitted to the County and distributed monthly to the local units based on population and road miles.

Increase in the 2015 wheel tax due to 13 months of taxes being collected during the year (September 2014 - September 2015). Prior year tax collections were several months behind.

Source: City of South Bend Accounting Records

259 City of South Bend, Indiana Hotel/Motel Tax Revenue - Cash Basis - City Distributions Last Ten Fiscal Years

------Paid to City of South Bend------Direct Payments------Century Professional Cumulative 2008 Century Center Subtotal: 1992 Century 2008 Other Center Sports Develop. Capital Impr. Century Center Energy Paid to City Center Century Center Century Center Total Hotel/ %

Year Fund Fund Fund Bonds Debt Serv of South Bend Bonds Bonds Projects Motel Tax Change 2009 1,347,651 530,137 150,000 - 2,027,788 - 198,500 265,258 2,491,546 -24.22% 2010 1,313,152 521,800 150,000 399,000 2,383,952 - - 97,000 2,480,952 -0.43% 2011 1,313,436 494,325 150,000 400,000 2,357,761 - - - 2,357,761 -4.97% 2012 1,313,436 489,152 150,000 398,000 2,350,588 - - - 2,350,588 -0.30% 2013 1,313,436 - 150,000 398,500 1,861,936 - - - 1,861,936 -20.79% 2014 1,313,450 - 150,000 400,000 1,863,450 - - 457,739 2,321,189 24.67% 2015 1,313,450 - 150,000 492,000 1,955,450 - - 976,855 2,932,305 26.33% 2016 1,313,450 - 150,000 396,000 1,859,450 - - 713,601 2,573,051 -12.25% 2017 1,275,000 - 150,000 394,000 1,819,000 - - 546,965 2,365,965 -8.05% 2018 1,275,000 395,000 221,437 1,891,437 687,192 2,578,629 8.99% The hotel/motel tax was enacted in 1973 and the current tax rate is 6%. The tax is accounted for in a fund of the Saint Joseph County government and is administered by the 11 member Saint Joseph County Board of Managers for Hotel-Motel Tax. Appointments to the Board of Managers are made by the Mayors of South Bend and Mishawaka and the Saint Joseph County Commissioners. Proceeds from the hotel/motel tax fund are budgeted and distributed annually to important economic development and tourism projects in the County. South Bend receives distributions for the operations, maintenance and debt service of Century Center (convention center), the Cumulative Capital Development Fund (used for repayment of 1994 Century Center Bonds), repayment of a 2008 Century Center Bond and other capital projects. Hotel/Motel tax will also be used to pay the 2015 Energy Conservation Bond which was issued by the City for the energy improvements made at the Century Center in 2015. The hotel/motel tax fund also supports other activities not included in the City of South Bend's financial statements such as the South Bend/Mishawaka Convention and Visitors Bureau. The total distribution of hotel/motel tax during 2017 to all organizations was $4,416,002. The cash balance in the County Hotel/Motel Tax Fund was $5,453,192 at December 31, 2017.

Source: City of South Bend Accounting Records and Saint Joseph County Auditor's Office

Cumulative 2008 Capital Impr. Century Center Fund Bonds

Century Center Fund

260 City of South Bend, Indiana Professional Sports Development (PSDA) Tax - Cash Basis Last Ten Fiscal Years

Total PSDA % Year Tax Change 2009 617,304 55.54% 2010 640,760 3.80% 2011 409,020 -36.17% 2012 721,763 76.46% 2013 597,111 -17.27% 2014 551,252 -7.68% 2015 628,261 13.97% 2016 760,390 21.03% 2017 409,659 -46.13% 2018 - 0.00%

The Professional Sports Development Area (PSDA) tax is a combination of Indiana state income tax withholding, local income tax withholding and sales tax withholding from businesses and employees in South Bend's designated PSDA area, which includes the College Football Hall of Fame, Century Center, Coveleski Stadium, Morris Performing Arts Center, Palais Royale Ballroom and Studebaker National Museum. South Bend's PSDA area was formed on November 3, 1997 and expires on December 31, 2027. PSDA capture of state sales and income taxes ended in 2017. The City expects one more payment of PSDA tax to be received in 2019.

The PSDA taxes are collected by the Indiana Department of Revenue and are remitted on a monthly basis to Saint Joseph County which issues a check to the City of South Bend. There are currently four professional sports development areas in the State--South Bend, Indianapolis/Marion County, Evansville and Ft. Wayne.

PSDA tax revenue increased in 2009 primarily due to the increase in the State of Indiana sales tax rate from 6% to 7% and the increase in local option income taxes from .8% to 1.75% as a consequence of property tax reform. PSDA tax revenue decreased in 2011 due to delays in payments in amounts owed by the State until 2012. The decrease PSDA tax revenues in 2014 were due to a delay in payments from the state whereas the increase in 2015 is due to 12 months of receipts being deposited. In prior years, PSDA tax revenue has been used to fund the College Football Hall of Fame Capital Fund. PSDA tax revenue is pledged to pay debt service on 2010 Coveleski Stadium Taxable Revenue bonds in the amount of $4,980,000 issued on December 23, 2010. The bond proceeds were used to make certain capital improvements to the City-owned facility. The operations of the minor league baseball team (South Bend Cubs) in the stadium accounts for the majority of PSDA tax revenue earned each year.

Source: City of South Bend Accounting Records

PSDA Tax Collections - Ten Year Trend

800,000 700,000 600,000 500,000 400,000 Dollars 300,000 200,000 100,000 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Year

261 City of South Bend, Indiana Cable Television Franchise Fee Collections - Cash Basis Last Ten Years

Total % Year Comcast AT&T Franchise Fees Change 2009 702,048 41,043 743,091 7.01% 2010 817,023 131,263 948,286 27.61% 2011 677,949 176,586 854,535 -9.89% 2012 691,586 192,621 884,207 3.47% 2013 736,071 191,529 927,600 4.91% 2014 717,156 238,309 955,465 3.00% 2015 723,676 281,873 1,005,549 5.24% 2016 749,565 256,611 1,006,176 0.06% 2017 771,128 156,394 927,522 -7.82% 2018 714,471 226,562 941,033 1.46%

Pursuant to Indiana State law, the City of South Bend receives video franchise fees in the amount of 5% of gross revenue for cable operations in the City. The payments are made to the City on a quarterly basis. The franchise agreement with Comcast was effective October 19, 1998 and the franchise agreement with AT&T was effective January 1, 2009.

The video franchise fee revenue is deposited in the General Fund and is used for general operating costs. A portion of the proceeds ($43,000) are spent on support of the local public access channel.

Under Indiana State law, the City is required to submit an Annual Franchise Fee Report (State Form 55122) summarizing franchise fee revenue received during the year and the purpose for which the revenue was expended. The report must be file with the Indiana Utility Regulatory Commission by March 1st of the following year.

Source: City of South Bend Accounting Records

262 Debt Capacity

These schedules contain information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.

263 City of South Bend, Indiana Computation of Legal Debt Margin ESTIMATED December 31, 2018

Civil City Net Assessed Valuation (2018 pay 2019) of Taxable Property in South Bend $ 2,498,376,757 Debt limit: 2% of one third thereof 16,655,845 Less Bonds subject to limitation: Economic Development Income Tax Bonds of 2015 (Parks Bond) (4,980,000) Economic Development Income Tax Bonds of 2018 (Zoo Bond) (3,440,000) General Obligation Bonds, Series 2018 (Fire Station #9) (4,970,000) Issuance Margin $ 3,265,845 Percentage of Debt to Debt Limit 80.39%

Park District Net Assessed Valuation (2018 pay 2019) of Taxable Property in South Bend $ 2,498,376,757 Debt limit: 2% of one third thereof 16,655,845 Less Bonds subject to limitation: Park District Bonds, Series 2017 (A-K) (13,725,000) Issuance Margin $ 2,930,845 Percentage of Debt to Debt Limit 82.40%

Redevelopment District Net Assessed Valuation (2018 pay 2019) of Taxable Property in South Bend $ 2,498,376,757 Debt limit: 2% of one third thereof 16,655,845 Less Bonds subject to limitation: Special Taxing District Bonds of 2014 (1,365,000) Redevelopment District Bonds of 2018 (TIF Parks Bond) (11,590,000) Issuance Margin $ 3,700,845 Percentage of Debt to Debt Limit 77.78%

A 2% debt limit is established by the Constitution of the State of Indiana. This limit is established for general obligation bonds, Economic Development Income Tax revenue bonds, tax revenue notes and other types of indebtedness. This limitation does not include revenue bonds payable from governmental funds (excluding EDIT bonds) shown in the general long term debt account group. Indiana law allows the creation of separate municipal corporations to provide vital governmental functions. Each of these municipal corporations (including the Redevelopment Authority and Redevelopment Commission) has its own 2% debt limit, even if they have the same or similar boundaries.

264 City of South Bend, Indiana Legal Debt Margin Information Last Ten Fiscal Years

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Civil City Debt Limit (1)$ 17,792,583 $ 16,356,704 $ 15,495,323 $ 15,599,467 $ 15,579,379 $ 14,731,511 $ 15,068,462 $ 15,181,132 $ 16,109,715 $ 16,655,845 Total Net Debt Applicable To Limit 5,500,000 9,850,000 8,910,000 7,650,000 6,335,000 4,970,000 7,270,000 5,835,000 5,190,000 13,390,000 Debt Margin 12,292,583 6,506,704 6,585,323 7,949,467 9,244,379 9,761,511 7,798,462 9,346,132 10,919,715 3,265,845 Percentage of Debt Limit 30.91% 60.22% 57.50% 49.04% 40.66% 33.74% 48.25% 38.44% 32.22% 80.39%

Park District Debt Limit (1) $17,792,583 $16,356,704 $15,495,323 $15,599,467 $15,579,379 $14,731,511 $15,068,462 $15,181,132 $16,109,715 $ 16,655,845 Total Net Debt Applicable To Limit ------14,075,000 13,725,000 Debt Margin 17,792,583 16,356,704 15,495,323 15,599,467 15,579,379 14,731,511 15,068,462 15,181,132 2,034,715 2,930,845 Percentage of Debt Limit 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 87.37% 82.40%

Redevelopment District Debt Limit (1) $17,792,583 $16,356,704 $15,495,323 $15,599,467 $15,579,379 $14,731,511 $15,068,462 $15,181,132 $16,109,715 $ 16,655,845 Total Net Debt Applicable To Limit 5,010,000 4,715,000 4,085,000 4,085,001 3,405,000 3,010,000 2,615,000 2,210,000 1,795,000 12,955,000 Debt Margin 12,782,583 11,641,704 11,410,323 11,514,466 12,174,379 11,721,511 12,453,462 12,971,132 14,314,715 3,700,845 Percentage of Debt Limit 28.16% 28.83% 26.36% 26.19% 21.86% 20.43% 17.35% 14.56% 11.14% 77.78%

(1) A 2% of net assessed value debt limit has been established by the Constitution of the State of Indiana for certain type of debt including general obligation bonds, Economic Development Income Tax bonds and tax revenue notes. This limitation does not apply to revenue bonds payable from governmental or proprietary funds.

265 City of South Bend, Indiana Ratios of Outstanding Debt by Type Last Ten Fiscal Years

Governmental Activities Business-Type Activities South Bend South Bend General Total Debt Estimated Debt Fiscal Obligation Revenue Mortgage Notes/Loans Capital Revenue Mortgage Notes/Loans Capital Primary Estimated Per Personal Percent of Year Bonds Bonds Bonds Payable Leases Bonds Bonds Payable Leases Government Population (1) Capita Income (2) Income

2009 - 113,975,000 23,061,148 8,470,308 6,214,206 68,225,000 829,020 16,145,358 893,233 237,813,273 106,192 2,239 3,679,658,992 6.46% 2010 - 111,510,000 21,117,295 6,323,199 5,299,341 72,655,000 717,705 16,755,369 799,402 235,177,311 101,168 2,325 3,505,572,368 6.71% 2011 - 101,472,431 19,724,490 4,431,871 7,510,749 88,655,000 660,510 15,542,372 1,077,642 239,075,065 101,168 2,363 3,371,120,096 7.09% 2012 - 96,410,000 17,883,530 4,953,639 8,336,120 117,650,000 601,470 13,848,901 3,641,362 263,325,022 101,168 2,603 3,371,120,096 7.81% 2013 - 90,172,826 23,079,781 3,030,554 8,777,238 118,121,963 546,973 4,121,010 3,831,933 251,682,278 101,168 2,488 3,371,120,096 7.47% 2014 - 84,862,512 21,331,548 1,617,491 8,481,375 111,209,874 480,604 3,794,664 3,307,802 235,085,870 101,168 2,324 3,371,120,096 6.97% 2015 - 107,815,890 13,904,973 4,831,752 8,491,407 102,871,921 5,851,565 3,458,899 4,411,042 251,637,449 101,168 2,487 3,371,120,096 7.46% 2016 - 99,040,132 12,091,550 4,647,381 10,929,075 95,477,047 5,556,865 2,582,205 6,585,123 236,909,378 101,168 2,342 3,492,622,864 6.78% 2017 14,081,478 111,887,531 10,224,972 4,437,115 9,795,612 87,219,814 5,255,484 2,398,821 7,456,169 252,756,996 101,168 2,498 3,492,622,864 7.24% 2018 18,737,645 120,483,913 8,300,854 4,108,822 12,832,195 80,178,104 4,951,979 2,231,783 7,994,705 259,820,000 101,168 2,568 3,492,622,864 7.44%

Percent of Total Debt 7.21% 46.37% 3.19% 1.58% 4.94% 30.86% 1.91% 0.86% 3.08% 100.00%

Sources: City of South Bend Comprehensive Annual Financial Reports (1) U.S. Census Bureau, 2010 Census information (http://factfinder.census.gov/). 2016 information not available. (2) The City's estimated personal income is computed as City population x City of South Bend Median Household Income from U.S. Census Bureau, 2012-2016 American Community Survey 5-Year Estimates (http://factfinder.census.gov/)

$180 M Governmental Activities Debt Business-Type Activities Debt $140 M $160 M Capital Leases Capital $140 M $120 M Leases

$120 M Notes/Loans Payable $100 M Notes/Loans $100 M Payable Mortgage $80 M Bonds $80 M

Mortgage $60 M Revenue $60 M Bonds Bonds $40 M

$40 M General Revenue $20 M Obligation Bonds Bonds 0 $20 M 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

266 City of South Bend, Indiana Computation of Direct and Overlapping Debt December 31, 2018

Percentage Amount Ratio of Debt/ Ratio of Debt/ Gross Applicable to Applicable to Debt Per Net Assessed Personal Debt South Bend South Bend Capita Value Income Direct Debt: City of South Bend General Obligation Bonds$ 18,737,645 100.00%$ 18,737,645 Revenue Bonds - Governmental Activities 120,483,913 100.00%$ 120,483,913 Mortgage Bonds - Governmental Activities 8,300,854 100.00% 8,300,854 Notes Payable - Governmental Activities 4,108,822 100.00% 4,108,822 Capital Leases - Governmental Activities 12,832,195 100.00% 12,832,195 Total Direct Debt and Lease Obligation Debt 164,463,429 1,626$ 6.81% 3.50%

Overlapping Debt (1) South Bend Community School Corporation $ 86,458,200 52.85%$ 51,999,309 South Bend Public Transport - 62.41% 234,038 St. Joseph County Public Library 5,840,000 49.51% 1,220,422 St. Joseph County Airport Authority 9,495,000 28.17% 3,042,360 St. Joseph County 29,645,000 28.17% 13,570,838 St. Joseph County Solid Waste Management - 28.17% 125,382 Penn-Harris-Madison School Corporation 48,507,671 2.67% 955,117 Mishawaka-Penn-Harris Public Library - 2.19% 77,198 Total Overlapping and Underlying Direct Debt and Lease Obligations 71,224,664 704$ 2.95% 1.51% Total Direct Debt and Lease Obligation Debt and Overlapping and $ 235,688,093 2,330$ 9.75% 5.01% Underlying Direct Debt and Lease Obligations

Ratio Factors Net Assessed Valuation (2017 payable 2018) 2,416,457,221 Population - 2010 Census 101,168 South Bend Median Household Income 2016 46,489 Estimated South Bend Total Personal Income (2 x 3) 4,703,199,152

(1) Overlapping debt percentages are based on the net assessed value of South Bend properties in proportion to the total net assessed value. (2) U.S. Census Bureau, 2010 Census information (http://factfinder.census.gov/). 2016 information not available. (3) U.S. Census Bureau, 2012-2016 American Community Survey 5-Year Estimates (http://factfinder.census.gov/) 267 City of South Bend, Indiana Ratio of Annual Debt Service Expenditures For General Obligation Bonded Debt to Total Governmental Fund Expenditures Last Ten Fiscal Years December 31, 2018

Total Ratio of Debt Service Fiscal Total Debt Governmental Fund To Governmental Fund Year Principal Interest Service Expenditures Expenditures 2009 - - - 142,962,710 0.00% 2010 - - - 150,758,014 0.00% 2011 - - - 172,397,679 0.00% 2012 - - - 162,460,000 0.00% 2013 - - - 152,889,475 0.00% 2014 - - - 154,300,097 0.00% 2015 - - - 172,658,733 0.00% 2016 - - - 170,976,084 0.00% 2017 - - - 174,542,237 0.00% 2018 426,149 288,967 715,116 186,199,998 0.38%

Source - City of South Bend Comprehensive Annual Financial Reports

268 City of South Bend, Indiana Ratio of Net General Obligation Bonded Debt to Net Assessed Valuation and Net Bonded Debt Per Capita Last Ten Fiscal Years

Percent of Net Gross Debt Service Net GO Bonded Debt Net GO Tax Year/ Net Assessed General Obligation Monies General Obligation To Net Assessed Bonded Debt Collection Year Population (1) Value Bonded Debt Available Bonded Debt Value Per Capita 2007/2008 104,905 $ 2,976,080,798 $ - -$ $ - 0.00% $ - 2008/2009 106,192 2,668,887,419 - - - 0.00% - 2009/2010 101,168 2,453,505,573 - - - 0.00% - 2010/2011 101,168 2,324,451,862 - - - 0.00% - 2011/2012 101,168 2,380,874,608 - - - 0.00% - 2012/2013 101,168 2,371,087,697 - - - 0.00% - 2013/2014 101,168 2,209,726,672 - - - 0.00% - 2014/2015 101,168 2,260,269,318 - - - 0.00% - 2015/2016 101,168 2,277,169,743 - - - 0.00% - 2016/2017 101,168 2,327,500,241 14,081,478 14,081,478 0.61% 139 2017/2018 101,168 2,416,457,221 18,737,645 - 18,737,645 0.78% 185 The City of South Bend has no General Obligation bonded debt.

(1) U.S. Census Bureau, 2010 Census information (http://factfinder.census.gov/). 2017 information not available.

269 City of South Bend, Indiana Saint Joseph County Hotel/Motel Tax Board Statement of Estimated Cash Flow and Debt Service Coverage

Projected 2011 B 2013 2015 Hotel/Motel Century Center Century Center Century Center Estimated Tax Refunding Refunding Energy Conservation Total Annual Excess Estimated Year Revenues Bonds (1) Bonds Bonds Debt Service Funds Coverage 2019 4,893,930 - 395,000 162,702 557,702 4,336,228 877.52% 2020 4,942,869 - 396,500 280,090 676,590 4,266,279 730.56% 2021 4,992,298 - 397,000 285,614 682,614 4,309,684 731.35% 2022 5,042,221 - 396,500 291,274 687,774 4,354,447 733.12% 2023 5,092,643 - 395,000 297,175 692,175 4,400,468 735.75% 2024 5,143,570 - 394,500 303,221 697,721 4,445,849 737.20% 2025 5,195,005 - 396,000 309,315 705,315 4,489,690 736.55% 2026 5,246,955 - 283,500 315,561 599,061 4,647,894 875.86% 2027 5,299,425 - 84,500 321,964 406,464 4,892,961 1303.79% 2028 5,352,419 - - 328,529 328,529 5,023,890 1629.21% 2029 5,405,943 - - 335,259 335,259 5,070,684 1612.47% 2030 5,460,003 - - 342,159 342,159 5,117,844 1595.75% 2031 5,514,603 - - 349,334 349,334 5,165,269 1578.60% 2032 5,569,749 - - 176,508 176,508 5,393,241 3155.52% 2033 5,625,446 - - - - 5,625,446 n/a Total $ 78,777,080 $ -$ 3,138,500 $ 4,098,705 $ 7,237,205 $ 71,539,875

Source: Saint Joseph County Hotel/Motel Tax Board financial reports City of South Bend Debt Schedules

(1) $150,000 paid from hotel/motel tax revenue. The balance paid from City of South Bend revenue sources.

270 City of South Bend, Indiana Schedule of Revenue Bond Coverage Water Utility Bonds Last Ten Years

Gross Net Revenue Debt Service Requirements Operating Operating Available for Debt Year Revenue Expenses (1) Debt Service Principal Interest Total Coverage 2009 13,471,890 8,838,405 $ 4,633,485 2,481,871 754,108 $ 3,235,979 143.19% 2010 13,513,995 8,560,390 4,953,605 2,605,840 937,293 3,543,133 139.81% 2011 14,032,074 9,301,552 4,730,522 2,729,925 823,265 3,553,190 133.13% 2012 14,190,243 9,021,274 5,168,969 821,847 823,944 1,645,791 314.07% 2013 13,783,701 10,665,913 3,117,788 1,241,768 809,673 2,051,441 151.98% 2014 14,373,176 10,105,709 4,267,467 1,251,588 769,025 2,020,613 211.20% 2015 14,204,285 10,651,321 3,552,964 1,319,285 732,394 2,051,679 173.17% 2016 15,091,372 12,081,699 3,009,673 977,113 623,226 1,600,339 188.06% 2017 15,283,325 11,421,026 3,862,299 1,606,652 623,909 2,230,561 173.15% 2018 16,767,283 11,766,084 5,001,199 394,873 319,700 714,573 699.89%

(1) Operating expenses exclude depreciation.

Operating revenue used to make debt service payments is obtained primarily through monthly user charges to water

Source - City of South Bend Comprehensive Annual Financial Report.

271 City of South Bend, Indiana Schedule of Revenue Bond Coverage Wastewater Utility Bonds Last Ten Years

Gross Net Revenue Debt Service Requirements Operating Operating Available for Debt Year Revenue Expenses (1) Debt Service Principal Interest Total Coverage 2009 24,313,147 17,504,825 $ 6,808,322 3,130,000 2,557,940 $ 5,687,940 119.70% 2010 25,444,404 12,193,363 13,251,041 3,385,205 2,314,275 5,699,480 232.50% 2011 29,023,547 14,869,660 14,153,887 3,867,584 2,737,027 6,604,611 214.30% 2012 30,963,483 13,777,728 17,185,755 4,736,450 3,489,057 8,225,507 208.93% 2013 31,926,078 11,526,554 20,399,524 5,080,425 3,354,156 8,434,581 241.86% 2014 34,009,117 14,313,967 19,695,150 6,320,626 3,376,045 9,696,671 203.11% 2015 (3) 36,635,501 13,557,598 23,077,903 4,691,336 3,419,351 8,110,687 284.54% 2016 39,061,562 16,920,370 22,141,192 7,522,453 2,342,132 9,864,586 224.45% 2017 38,794,212 22,942,677 15,851,535 7,666,400 2,197,813 9,864,213 160.70% 2018 39,931,429 16,218,116 23,713,313 7,821,444 2,033,062 9,854,506 240.63%

(1) Operating expenses exclude depreciation. (2) Two large Sewage Works revenue bonds were issued during 2007 with principal and interests payments beginning in 2008. These bonds are part of the City of South Bend's long term combined sewer overflow (CSO) control plan. (3) Sewer bonds were refunded in 2015 and the principal repayments are not included in the 2015 principal total.

Operating revenue used to make debt service payments is obtained primarily through monthly user charges to sewer customers.

Source - City of South Bend Comprehensive Annual Financial Report

272 City of South Bend, Indiana Municipal Sewage Works Annual Wastewater Flow Data

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Capacity (MGD) 48 48 48 48 48 48 48 48 48 48 Average Daily Flow 38.42 30.86 35.80 31.77 30.69 32.00 30.20 43.87 35.80 38.47 Peak Flow 68.80 62.00 72.50 63.70 62.50 68.50 57.70 67.80 62 71 Annual Flow (MG) 14,024 11,264 13,068 11,596 11,203 11,677 11,023 16,014 13,067 14,042

Number of Customers - South Bend Municipal Sewage Works Total Number Year of Customers 2009 36,664 2010 38,455 2011 39,027 2012 39,068 2013 39,322 2014 39,461 2015 39,763 2016 40,073 2017 40,543 2018 40,679

Source: City of South Bend Environmental Services Department

273 City of South Bend, Indiana Statement of City-Owned Utility Debt December 31, 2018

South Bend Municipal Sewage Works Sewage Works State Revolving Fund (SRF) Loan of 2009$ 1,920,133 Sewage Works Revenue Bonds of 2010 6,345,000 Sewage Works Revenue Bonds of 2011 15,480,000 Sewage Works Revenue Bonds of 2012 18,755,000 Sewage Works Revenue Bonds of 2013 A 4,100,000 Sewage Works Refunding Revenue Bonds of 2015 19,850,000 Total Sewage Utility Debt 66,450,133

South Bend Municipal Waterworks Waterworks Revenue Bonds of 2009, Series A State Revolving Fund (SRF) Loan$ 311,650 Waterworks Revenue Bonds of 2009, Series B Indiana Bond Bank 4,085,000 Waterworks Revenue Bonds of 2012 2,005,000 Waterworks Revenue Refunding Bonds of 2012, Series B 6,570,000 Waterworks Refuding Bonds of 2016 2,895,000 Total Water Utility Debt 15,866,650 Total Utility Debt $ 82,316,783

Source: City of South Bend Finance Department

274 City of South Bend, Indiana Estimated Debt Service Coverage Calculation of Sewage Works

December 31, 2018

Operating Revenues $ 39,931,429 Less: Operation and Maintenance Expenses (Net of Depreciation) (16,218,116) Net Revenues Available for Debt Service 23,713,313

Estimated Combined Annual Debt Service 9,148,379 Coverage - $ $ 14,564,934 Coverage - % 259.21%

275 City of South Bend, Indiana Estimated Debt Service Coverage Calculation of Water Utility

December 31, 2018

Operating Revenues $ 16,767,283 Less: Operation and Maintenance Expenses (Net of Depreciation) (11,766,084) Net Revenues Available for Debt Service 5,001,199

Estimated Combined Maximum Annual Debt Service 3,192,871 Coverage - $ $ 1,808,328 Coverage - % 156.64%

276 City of South Bend, Indiana Projected City of South Bend COIT Revenue 0.6% COIT Tax Rate Levy is used to Distribute COIT

Projected St. Joseph County COIT Amount Year of Projected Projected Available For Collection Distribution COIT Debt Service 2019 $ 35,539,674 34.18% $ 12,148,294 2020 36,250,467 34.18% 12,391,260 2021 36,975,477 34.18% 12,639,085 2022 37,714,986 34.18% 12,891,867 2023 38,469,286 34.18% 13,149,704 2024 39,238,672 34.18% 13,412,698 2025 40,023,445 34.18% 13,680,952 2026 40,823,914 34.18% 13,954,571 2027 41,640,392 34.18% 14,233,663 2028 42,473,200 34.18% 14,518,336 Total $ 133,020,430

Estimated 2% increase to COIT distributions due to improving economic conditions. Starting in 2017, COIT is part of the new Local Income Tax (LIT) category.

Source: Department of Local Government Finance (DLGF)

277 City of South Bend, Indiana Projected City of South Bend CEDIT Revenue 0.4% CEDIT Tax Rate Levy is used to Distribute CEDIT

Projected St. Joseph County CEDIT Amount Year of Projected Projected Available For Collection Distribution CEDIT Debt Service 2019 28,586,914 41.39% 11,831,812 2020 29,158,652 41.39% 12,068,448 2021 29,741,825 41.39% 12,309,817 2022 30,336,662 41.39% 12,556,014 2023 30,943,395 41.39% 12,807,134 2024 31,562,263 41.39% 13,063,276 2025 32,193,508 41.39% 13,324,542 2026 32,837,378 41.39% 13,591,033 2027 33,494,126 41.39% 13,862,854 2028 34,164,008 41.39% 14,140,111 Total $ 129,555,040

Estimated 2% increase to CEDIT distributions due to improving economic conditions. Starting in 2017, CEDIT is part of the new Local Income Tax (LIT) category.

Source: Department of Local Government Finance (DLGF)

278 City of South Bend, Indiana Projected City of South Bend LOIT Revenue .25% LOIT Tax Rate

Projected St. Joseph County PS LOIT Amount Year of Projected Projected Available For Collection Distribution CEDIT Debt Service 2019 $ 17,784,064 48.14% $ 8,560,555 2020 18,139,745 48.14% 8,731,766 2021 18,502,540 48.14% 8,906,401 2022 18,872,591 48.14% 9,084,529 2023 19,250,043 48.14% 9,266,220 2024 19,635,044 48.14% 9,451,544 2025 20,027,745 48.14% 9,640,575 2026 20,428,299 48.14% 9,833,387 2027 20,836,865 48.14% 10,030,055 2028 21,253,603 48.14% 10,230,656 Total $ 93,735,689

Estimated 2% increase to PS LOIT distributions due to improving economic conditions. Starting in 2017, PS LOIT is part of the new Local Income Tax (LIT) category.

Source: Department of Local Government Finance (DLGF)

279 City of South Bend, Indiana Statement of Estimated Cash Flow and Debt Service Coverage (COIT)

Projected Redevelopment COIT First Mortgage First Mortgage City of South Bend District Lease Rental Revenue Revenue Refunding Revenue Bonds Estimated COIT Taxable Revenue Refunding Bonds of 2010 Bonds, Series 2012 Series 2013 Total Lease Excess Estimated Year Revenues Bonds, Series 2010 Lease Payments Lease Payments Lease Payments Payments Funds Coverage

2019 $ 10,881,819 $ 353,970 $ 671,144 $ 1,557,920 $ 398,830 $ 2,981,864 $ 7, 899,955 364.93% 2020 11,099,456 - 672,500 1, 555,880 396,705 2,625,085 8, 474,371 422.82% 2021 11,321,445 - 336,600 1, 566,750 399,355 2,302,705 9, 018,740 491.66% 2022 11,547,874 - - 1, 555,000 396,780 1,951,780 9, 596,094 591.66% 2023 11,778,831 - - 779,625 398,980 1,178,605 10, 600,226 999.39% 2024 12,014,408 - - - 406,543 406,543 11,607,865 2955.26% 2025 12,254,696 - - - 411,493 411,493 11,843,203 2978.11% 2026 12,499,790 - - - 410,643 410,643 12,089,147 3043.96% 2027 12,749,786 - - - 414,149 414,149 12,335,637 3078.55% 2028 13,004,781 - - - 421,605 421,605 12,583,176 3084.59% 2029 13,264,877 - - - 422,742 422,742 12,842,135 3137.82% 2030 13,530,175 - - - 422,742 422,742 13,107,433 3200.57% 2031 13,800,778 - - - 427,550 427,550 13,373,228 3227.87% 2032 14,076,794 - - - 431,254 431,254 13,645,540 3264.15% 2033 14,358,329 - - - 433,925 433,925 13,924,404 3308.94% 2034 14,645,496 - - - - - 14,645,496 n/a 2035 14,938,406 - - - - - 14,938,406 n/a 2036 15,237,174 - - - - - 15,237,174 n/a Total $ 233,004,914 $ 353,970 $ 1,680,244 $ 7,015,175 $ 6,193,296 $ 15,242,685 $ 217,762,229 1528.63%

Note: These payments include principal and interest.

Source: City of South Bend Finance Department

280 City of South Bend, Indiana Statement of Estimated Cash Flow and Debt Service Coverage (CEDIT)

Projected 2014 City of South Bend St. Joseph County 2015 Estimated CEDIT PSAP Revenue Parks/CEDIT Total Lease Excess Estimated Year Revenues Bond Bond Payments Funds Coverage 2019 $ 11,028,367 $ 199,242 $ 382,731 $ 581,973 $ 10,446,394 1895.00% 2020 11,248,934 199,460 381,131 580,591 10,668,343 1937.50% 2021 11,473,913 199,271 374,381 573,652 10,900,261 2000.15% 2022 11,703,391 199,423 372,556 571,980 11,131,412 2046.12% 2023 11,937,459 199,423 375,581 575,005 11,362,454 2076.06% 2024 12,176,208 199,314 368,381 567,696 11,608,512 2144.85% 2025 12,419,732 154,405 381,031 535,436 11,884,296 2319.55% 2026 12,668,127 155,363 373,231 528,594 12,139,533 2396.57% 2027 12,921,490 154,724 375,356 530,080 12,391,410 2437.65% 2028 13,179,919 155,298 377,181 532,479 12,647,440 2475.20% 2029 13,443,518 154,128 383,616 537,744 12,905,774 2499.98% 2030 13,712,388 154,172 384,038 538,210 13,174,179 2547.78% 2031 13,986,636 154,051 388,463 542,514 13,444,122 2578.12% 2032 14,266,369 153,630 387,175 540,805 13,725,563 2637.99% 2033 14,551,696 153,038 389,813 542,851 14,008,845 2680.61% 2034 14,842,730 153,582 391,781 545,364 14,297,366 2721.62% 2035 15,139,584 - 593,094 593,094 14,546,491 2552.65% 2036 15,442,376 - - - 15,442,376 n/a 2037 15,751,224 - - - 15,751,224 n/a Total $ 251,894,061 $ 2,738,526 $ 6,679,541 $ 9,418,067 $ 242,475,994 2674.58%

Note: These payments include principal and interest.

Source: City of South Bend Finance Department

281 City of South Bend, Indiana Estimated Tax Increment Revenue Erskine Village Project

Estimated 12/13 Estimated Tax Year / Tax Net Tax Tax Increment Collection Year Increment (1) Rate (2) Revenue

2012/2013 $ 1,311,129 $ 4 $ 1,311,129 2013/2014 9,175 - 9,175 2014/2015 19,183 - 19,183 2015/2016 - - - 2016/2017 - - - 2017/2018 - - -

(1) The City passed back incremental assessed value for payable year 2013. The City will make a yearly decision on the pass back of incremental assessed value. The Redevelopment Commission released TIF for 2013 pay 2014, 2015 pay 2016, 2016 pay 2017,and 2017 pay 2018.

Source: City of South Bend Finance Department

282 Demographic and Economic Information

These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.

283 City of South Bend, Indiana Demographic Statistics Last Ten Years

South Bend South Bend Metropolitan Metro Area South Bend City of City of Percent Area Percent Total Personal Percent Metro Area Percent City of South Bend Percent South Bend Increase/ Median Family Increase/ Income (3) Increase/ Per Capita Increase/ South Bend Public School Increase/ Year Population (1) (Decrease) Income (2) (Decrease) (Millions) (Decrease) Income (3) (Decrease) Median Age (4) Enrollment (5) (Decrease) 2009 106,192 2.04% 43,403 -2.25% 10,581 -3.45% 33,151 -3.61% 32.3 20,451 -5.82% 2010 101,168 -4.73% 40,789 -6.02% 10,788 1.95% 33,819 2.02% 33.4 20,066 -1.88% 2011 101,168 0.00% 40,873 0.21% 11,447 6.11% 35,867 6.06% 33.3 19,467 -2.99% 2012 101,168 0.00% 40,873 0.00% 11,948 4.37% 37,505 4.57% 33.3 18,982 -2.49% 2013 101,168 0.00% 40,873 0.00% 12,196 2.08% 38,265 2.03% 33.3 19,680 3.68% 2014 101,168 0.00% 34,656 -15.21% 12,887 5.67% 40,342 5.43% 33.9 19,308 -1.89% 2015 101,168 0.00% 34,656 0.00% 13,560 5.22% 42,362 5.01% 34.0 18,680 -3.25% 2016 101,168 0.00% 34,523 -0.38% 14,074 3.79% 43,880 3.58% 34.9 18,110 -3.05% 2017 101,168 0.00% 35,758 3.58% 14,074 0.00% 43,880 0.00% 34.9 17,697 -2.28% 2018 101,168 0.00% 35,758 0.00% 14,700 4.45% 45,681 4.10% 33.4 17,225 -2.67%

Sources: (1) U.S. Census Bureau, 2010 Census information (http://factfinder.census.gov/). 2017 information not available. (2) U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates (http://factfinder.census.gov/) (3) Bureau of Local Economic Analysis, South Bend-Mishawaka, IN_MI Metropolitan Area Profile (https://www.bea.gov/). 2017 information not available. Personal income includes net earnings by place of residence; dividends, interest, and rent; and personal current transfer receipts received by the residents of South Bend- Mishawaka. (4) U.S. Census Bureau, Profile of General Demographic Characteristics (http://factfinder.census.gov/) (5) Indiana Department of Education, South Bend School Corporation Total Enrollment (http://compass.doe.in.gov/)

Metropolitan statistical area (MSA)- An area consisting of a core county or counties in which lies an urban area having a population of at least 50,000, plus adjacent counties having a high degree of social and economic integration with the core counties as measured through commuting ties.

284 City of South Bend, Indiana Demographic Statistics (Continued) Last Ten Years

December December December South Bend South Bend South Bend Metropolitan Percent Metropolitan Percent Metropolitan Area Labor Increase/ Area Increase/ Unemployment Year Force (1) (Decrease) Unemployment (1) (Decrease) Rate (1) 2009 154,409 -3.48% 17,713 120.15% 11.47% 2010 155,045 0.41% 17,869 0.88% 11.53% 2011 155,025 -0.01% 15,582 -12.80% 10.05% 2012 151,520 -2.26% 14,085 -9.61% 9.30% 2013 150,796 -0.48% 13,021 -7.55% 8.63% 2014 152,583 1.19% 10,040 -22.89% 6.58% 2015 154,598 1.32% 7,768 -22.63% 5.02% 2016 158,279 2.38% 7,176 -7.62% 4.53% 2017 157,856 -0.27% 5,442 -24.16% 3.45% 2018 160,969 1.97% 5,988 10.03% 3.72%

Source: (1) Bureau of Labor Statistics, Local Area Unemployment Statistics: South Bend-Mishwaka IN-MI Metropolitan Statistical Area (https://www.bls.gov/data/)

285 City of South Bend, Indiana Employment By Type and Industry Last Ten Years

Description 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total employment 174,085 165,304 163,945 166,847 165,809 165,629 168,314 171,852 175,721 176,231

By Type: Wage and salary employment 144,931 135,840 134,643 136,844 136,390 136,105 138,475 141,683 144,810 145,127 Proprietors employment 29,154 29,464 29,302 30,003 29,419 29,524 29,839 30,169 30,911 31,104 Farm proprietors employment 1,331 1,329 1,340 1,342 1,305 1,310 1,303 1,295 1,292 1,277 Nonfarm proprietors employment 27,823 28,135 27,962 28,661 28,114 28,214 28,536 28,874 29,619 29,827

By Industry: Farm employment 1,791 1,765 1,758 1,770 1,685 1,692 1,686 1,690 1,674 1,633 Nonfarm employment 172,29 4 163,539 162,187 165,077 164,124 163,937 166,628 170,162 174,047 174,598 Private nonfarm employment 154,068 145,200 143,893 146,880 146,807 147,148 150,006 153,455 157,232 157,803 Forestry, fishing, and related activities (D) (D) 245 270 301 287 (D) (D) (D) (D) Mining 105 96 117 105 154 173 (D) (D) (D) (D) Utilities (D) (D) (D) (D) (D) (D) (D) (D) (D) (D) Construction 9,257 7,988 6,909 6,928 6,631 6,811 6,827 7,341 7,736 8,216 Manufacturing 19,324 16,516 16,280 17,619 17,655 17,139 17,523 18,098 18,444 18,670 Wholesale trade 7,962 7,057 7,168 7,250 7,097 6,870 7,265 7,477 7,678 7,064 Retail trade 19,141 18,105 17,711 17,813 17,665 17,612 17,735 17,912 18,186 17,968 Transportation and warehousing (D) (D) 4,332 E (D) (D) (D) (D) (D) (D) (D) Information 2,556 (D) 2,227 2,080 2,114 2,265 2,266 2,147 2,053 1,993 Finance and insurance 7,028 6,988 6,814 7,021 6,796 6,212 6,055 6,143 6,188 6,668 Real estate and rental and leasing 6,423 6,128 5,928 6,100 5,986 6,064 6,271 6,225 6,502 6,423 Professional, scientific, and technical services 7,642 E 7,273 E 7,163 E 7,168 E 6,981 E 7,411 7,419 7,805 (D) 8,149 Management of companies and enterprises 1,218 E 1,246 E 1,306 E 1,403 E 1,513 E 2,194 2,331 2,390 (D) 2,801 Administrative and waste management services 9,111 8,108 8,524 8,356 7,912 7,785 8,142 8,169 8,657 8,442 Educational services 13,254 13,067 13,198 E 13,747 14,121 (D) (D) (D) 15,284 (D) Health care and social assistance 20,339 20,882 20,332 E 21,256 21,870 (D) (D) (D) 23,679 (D) Arts, entertainment, and recreation 2,839 2,655 2,625 2,811 2,767 2,809 2,749 2,742 2,852 3,132 Accommodation and food services 11,647 10,945 11,021 11,576 11,816 12,189 12,348 12,811 13,248 13,200 Other services, except public administration 10,196 (D) 9,728 10,031 10,038 9,939 10,316 10,385 10,569 10,512 Government and government enterprises 18,22 6 18,339 18,294 18,197 17,317 16,789 16,622 16,707 16,815 16,795 Federal, civilian 1,223 1,241 1,265 1,090 1,071 1,010 962 944 952 972 Military 1,003 1,013 1,003 1,043 1,006 990 1,002 1,023 1,005 972 State and local 16,000 16,085 16,026 16,064 15,240 14,789 14,658 14,740 14,858 14,851 State government 3,188 3,350 3,448 3,555 3,483 3,272 3,096 3,077 3,109 3,128 Local government 12,812 12,735 12,578 12,509 11,757 11,517 11,562 11,663 11,749 11,723

Source: Bureau of Local Economic Analysis (https://www.bea.gov/) * 2018 information not available

1 - The estimates of employment for 2001-2006 are based on the 2002 North American Industry Classification System (NAICS), a comprehensive, industrial classification system--developed and used by the United States, Canada, and Mexico--that groups establishments according to the similarity of their production processes. The estimates for 2007-2010 are based on the 2007 NAICS. The estimates for 2011 forward are based on the 2012 NAICS. 2 - Excludes limited partners. E The estimate shown here constitutes the major portion of the true estimate. (D) Not shown to avoid disclosure of confidential information, but the estimates for this item are included in the totals. Last updated: November 15, 2018-- revised statistics for 2001-2016.

Metropolitan statistical area (MSA)- An area consisting of a core county or counties in which lies an urban area having a population of at least 50,000, plus adjacen counties having a high degree of social and economic integration with the core counties as measured through commuting ties. 286 City of South Bend, Indiana Comparison of Growth Rates in Personal Income for St. Joseph County, The State of Indiana and U.S. Personal Income Last Ten Years

Amount in Amount in Millions Billions Annual Percentage Increase St. Joseph Co. Indiana U.S. St. Joseph Co. Indiana U.S. Calendar Personal Personal Personal Personal Personal Personal Year Income Income Income Income Income Income 2009 9,708 225,760 12,493 3.49% 4.96% 4.15% 2010 9,042 220,157 12,079 -6.86% -2.48% -3.31% 2011 9,144 227,692 12,460 1.14% 3.42% 3.15% 2012 10,257 256,257 13,998 12.17% 12.55% 12.35% 2013 10,395 259,524 14,175 1.35% 1.27% 1.26% 2014 10,967 269,592 14,983 5.50% 3.88% 5.70% 2015 11,657 279,704 15,711 6.29% 3.75% 4.86% 2016 11,781 289,164 16,116 1.06% 3.38% 2.58% 2017 12,472 301,008 16,820 5.87% 4.10% 4.37% 2018 12,472* 312,150 17,572 -100.00% 3.70% 4.47%

Average Annual Growth - Most Recent 5 Years 4.29% 3.67% 4.38% Average Annual Growth - Most Recent 10 Years 3.02% 3.84% 3.84%

Source: Bureau of Local Economic Analysis (https://www.bea.gov/) Note-- All dollar estimates are in current dollars (not adjusted for inflation). Last updated: March 3, 2019-- new estimates for 2016; revised estimates for 2012-2016. * 2018 information not available.

287 City of South Bend, Indiana Principal Employers - Current and Ten Years Ago December 31, 2017

2018 2009 Number of Percent Number of Percent Employer Type of Business Employees of Total Rank Employees of Total Rank Beacon Health System (Memorial) (2) Health Care 7,088 4.40% 1 3,529 2.64% 2 University of Notre Dame Higher Education 6,535 4.06% 2 4,596 3.44% 1 South Bend Community School Corp (2) Public Schools 3,432 2.13% 3 3,130 2.35% 3 Indiana University South Bend Higher Education 1,400 0.87% 4 1,259 0.94% 8 St. Joseph County Government 1,396 0.87% 5 1,305 0.98% 7 City of South Bend Government 1,285 0.80% 6 1,213 0.91% 9 Four Winds Casino (2) Casino and restaurants 1,200 0.75% 7 - 0.00% AM General Corporation Manufacturing/Assembly 873 0.54% 8 2,400 1.80% 5 Honeywell Aerospace (2) Aerospace Manufacturing 850 0.53% 9 0.00% Press Ganey (2) Health Care Management 688 0.43% 10 0.00% Saint Joseph Health System Health Care 2,617 1.96% 4 The Diocese of Fort Wayne/South Bend Parochial Schools 1,403 1.05% 6 Wal-Mart Retail Store - 1,111 0.83% 10 Total Number of Employees 24,747 15.37% 22,563 16.91%

Total Employees - South Bend Metropolitan Area Labor Force (1) 160,969 100.00% 133,433 100.00%

Source: Crowe Horwath CPAs and conversations with employers

(1) Bureau of Labor Statistics, Local Area Unemployment Statistics: South Bend-Mishwaka IN-MI Metropolitan Statistical Area (https://www.bls.gov/data/)

288 Operating Information

These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs.

289 City of South Bend, Indiana New Construction - Number of Permits and Property Values Last Ten Fiscal Years (Dollar Amounts in 000's)

Public Residential Residential Commercial Commercial Public Utility Manufacturing Manufacturing Total Value Number of Value Number of Value Utility Number Value Number of Value Total Value Increase/ Year Permits (in 000's) Permits (in 000's) of Permits (in 000's) Permits (in 000's) (in 000's) (Decrease) 2009 48 8,467 10 29,451 1,627 28,785 - - 66,703 -23.16% 2010 35 7,450 5 28,283 1,221 25,998 - - 61,731 -7.45% 2011 33 6,300 14 10,737 880 20,265 1 2,023 39,325 -36.30% 2012 45 9,827 11 21,247 - - 2 2,291 33,365 -15.16% 2013 50 15,136 8 4,954 - - 1 160 20,250 -39.31% 2014 51 13,101 12 10,392 - - - - 23,493 16.01% 2015 (1) 77 18,615 70 415,219 - - 6 28,460 462,294 1867.79% 2016 61 15,215 22 53,622 - - - - 68,837 -85.11% 2017 88 23,195 13 17,843 - - - 466 41,504 -39.71% 2018 92 26,069 19 41,335 - - - - 67,404 62.40%

Source - Consolidated City/County Building Department

(1) - Increase in commercial construction due to major construction taking place at the University of Notre Dame.

290 City of South Bend, Indiana Capital Asset and Infrastructure Statistics by Function/Program Last Ten Fiscal Years

As of December 31, Function/program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol units 25 25 19 19 19 19 19 19 19 19 Fire Stations 11 11 11 11 11 11 11 11 11 11 Training Center - - - - - 1 1 1 1 1 Rescue units 33 33 33 33 33 33 33 33 33 33 Refuse collection Collection trucks 21 23 23 19 19 19 19 19 - - Other public works Streets (miles) 532 532 499 525 525 525 525 525 525 525 Streetlights 2,500 2,500 2,500 2,700 2,700 3,000 3,015 3,015 3,015 3,015 Traffic signals 162 162 164 165 167 162 158 164 163 163 Parks and recreation Acreage 1,292 1,292 1,292 1,292 1,292 1,292 1,292 1,292 1,300 1,300 Playgrounds 23 23 23 23 23 23 23 23 23 23 Baseball/softball diamonds 27 27 27 27 27 27 27 27 27 27 Soccer/football fields 17 17 17 19 19 19 19 19 19 19 Swimming pools 2 2 2 2 2 2 2 2 2 2 Splash Pads 5 5 5 5 6 6 6 7 8 8 Community center 5 5 5 5 5 3 3 3 4 4 Water Water mains (miles) 560 580 582 583 584 583 583 583 586 587 Fire hydrants 5,317 5,345 5,377 5,401 5,436 5,448 5,439 5,459 5,539 5,550 Storage capacity (thousands of gallons) 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 Wastewater Sanitary sewers (miles) 534 534 534 528 526 527 527 527 535 537 Storm sewers (miles) 200 127 127 133 133 133 133 155 155 155 Treatment capacity (thousands of gallons) 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000

Sources: Various city departments

291 City of South Bend, Indiana Operating Indicators by Function/Program Last Ten Fiscal Years

As of December 31, Function/ Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Police: Physical arrests 3,785 3,077 3,626 3,174 2,959 2,608 2,483 2,342 2,229 2,664 Parking violations 1,479 979 904 1,051 1,019 299 691 480 919 548 Traffic violations 11,746 14,163 4,236 7,561 2,180 1,487 4,327 6,437 4,701 2,580 Fire: Emergency responses 14,341 15,578 15,408 15,720 15,865 15,902 15,340 15,886 16,829 22,659 Fires extinguished 264 225 251 214 220 227 213 236 339 278 Inspections 4,205 4,233 3,553 3,325 2,273 3,133 3,778 2,148 2,522 3,525 Refuse collection: Refuse collected (tons per day) (1) 70 120 123 128 122 128 149 139 142 142 Other public works: Street resurfacing (miles) 15 20 18 17 21 22 17 20 19 21 Potholes repaired (tonnage) 629 380 332 117 691 826 526 462 363 476 Parks and recreation: Athletic field permits issued 700 381 227 133 93 120 113 427 142 103 Fitness Center Admissions 74,438 60,118 67,408 61,002 63,671 67,428 64,547 67,294 73,405 68,306 Water: New billable housing starts 194 179 144 160 242 141 108 189 214 119 Water mains breaks 87 76 60 66 80 134 99 53 45 67 Average daily consumption 16,100 15,955 15,600 16,600 15,300 11,000 14,500 14,640 14,358 14,640 (thousands of gallons) Wastewater: Average daily sewage treatment 41,200 30,861 35,800 31,770 30,690 31,991 30,200 43,874 35,800 37,110 (thousands of gallons)

Sources: Various city departments

(1) 2007 and prior years were in cubic yards

292 City of South Bend, Indiana Full-Time Equivalent City Government Employees by Department Last Ten Fiscal Years

As of December 31, Department 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General Government: Mayor's Office 8 7 7 6 6 7 7 6 7 7 City Clerk's Office 5 5 5 5 5 5 5 5 5 5 Common Council (elected officials, part-time) 9 9 9 9 9 9 9 9 9 9 Administration and Finance 26 26 27 22 20 21 18 26 21 23 Legal Department 9 9 9 9 10 10 12 11 10 10 Engineering & Sustainability 16 19 17 15 13 14 16 18 18 23 Safety and Risk - - - 3 3 3 2 2 2 3 Human Rights - - - 6 6 6 6 6 5 5 Public Safety: Police Department 279 293 293 291 291 295 300 287 283 283 Communication Center 37 38 35 35 33 34 - - - - Fire Department 246 255 258 249 255 257 259 268 272 262 Building Maintenance 4 3 3 - - - - 3 2 4 Culture and Recreation: Parks and Recreation (2) 111 113 114 114 113 87 88 89 94 90 Convention and Events Management (1) 13 13 14 14 14 14 14 12 9 18 Economic Development: Department of Community Investment 26 26 25 24 26 25 25 23 22 24 Highways and Streets: Street Department 51 52 56 52 60 59 53 59 55 54 Traffic & Lighting 6 ------Enterprise Funds: Water Works 82 75 74 73 70 68 67 65 67 63 Wastewater 48 51 49 46 45 42 43 44 45 42 Organic Resources (formerly in Wastewater) - - - 6 6 6 6 6 6 6 Sewer 33 35 36 39 34 33 30 31 38 39 Solid Waste 26 26 23 24 26 22 21 25 23 22 Building Department 15 13 13 13 14 13 13 14 14 15 Code Enforcement/Animal Care & Control 27 23 25 25 24 23 23 26 29 26 Internal Service Fund: 311 Call Center - - - - 5 7 7 7 6 7 Innovation and Technology (3) ------17 20 Central Services 39 41 41 42 43 38 36 37 40 39 Total Positions 1,116 1,132 1,133 1,122 1,131 1,098 1,060 1,079 1,099 1,099

293 City of South Bend, Indiana Full-Time Equivalent City Government Employees by Department (Continued) Last Ten Fiscal Years

As of December 31, Department 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Summary by Activity General Government 73.00 75.00 74.00 75.00 77.00 82.00 82.00 90.00 100.00 112.00 Public Safety 566.00 589.00 589.00 575.00 579.00 586.00 559.00 558.00 557.00 549.00 Culture and Recreation 124.00 126.00 128.00 128.00 127.00 101.00 102.00 101.00 103.00 108.00 Economic Development 26.00 26.00 25.00 24.00 26.00 25.00 25.00 23.00 22.00 24.00 Highways and Streets 57.00 52.00 56.00 52.00 60.00 59.00 53.00 59.00 55.00 54.00 Enterprise Funds 231.00 223.00 220.00 226.00 219.00 207.00 203.00 211.00 222.00 213.00 Internal Service Fund 39.00 41.00 41.00 42.00 43.00 38.00 36.00 37.00 40.00 39.00 Total Positions 1,116.00 1,132.00 1,133.00 1,122.00 1,131.00 1,098.00 1,060.00 1,079.00 1,099.00 1,099.00

Excludes seasonal, part-time and temporary positions

(1) Includes reduction of 34 positions in the City's convention facility (Century Center) during 2007. Century Center is being managed by a private company under an agreement with the City of South Bend. (2) Potawatomi Zoo employees (33) became employees of the Potawatomi Zoological Society through a public-private partnership as of January 1, 2014. (3) Innovation & Technology became a stand alone department in 2017; this department includes technology employees as well as business analysis.

Source: City of South Bends Performance Based Budgets and personnel records

Summary of Employees by Activity

1,400.00 Total Positions

1,200.00 Public Safety

1,000.00 Enterprise Funds

800.00 Culture and Recreation General Government 600.00 Highways and Streets 400.00 Internal Service Fund 200.00 Economic - Development

294 City of South Bend, Indiana Salary Rate Comparison 1990 - 2018

----1st Class Patrol Officer------1st Class Fire Fighter--- Year Percent Base Salary Percent Base Salary Non-bargaining Teamsters 1990 3.62% 20,071$ 4.74%$ 19,869 3.00-4.00% .25 per hour 1991 0.92% 20,256 2.52% 20,369 3.00% .25 per hour 1992 4.69% 21,206 2.45% 20,869 3.00% .30 per hour 1993 0.44% 21,300 5.00% 21,912 4.24% 0.00% 1994 2.35% 21,800 0.00% 21,912 1.50% + $300 bonus .15 per hour 1995 4.82% 22,850 3.00% 22,569 1.50% + $300 bonus .30 per hour 1996 4.38% 23,850 5.00% 23,697 3.00% .27 per hour 1997 4.19% 24,850 4.87% 24,850 3.00% .33 per hour 1998 4.63% 26,000 0.60% 25,000 3.00% .37 per hour 1999 3.85% 27,000 2.60% 25,650 3.25% 3.50% 2000 5.56% 28,500 9.34% 28,045 3.50% 3.50% 2001 9.74% 31,275 11.52% 31,275 3.50% 4.00% 2002 4.50% 32,682 4.03% 32,534 4.00% 4.00% 2003 5.57% 34,504 4.04% 33,850 4.00% 4.00% 2004 6.01% 36,578 5.17% 35,600 4.00% 4.00% 2005 9.36% 40,000 12.36% 40,000 4.00% 4.00% 2006 2.50% 41,000 2.00% 40,800 2.00% 4.25% 2007 2.50% 42,025 2.50% 41,820 $750/0% .38 per hour 2008 3.50% 43,496 3.50% 43,285 3.00% 3.00% 2009 2.20% 44,453 2.00% 44,150 2.00% 2.00% 2010 0.00% 44,453 6.80% 47,150 2.00% 2.00% 2011 11.50% 49,563 4.06% 49,066 2.00% 0.00% 2012 2.00% 50,554 2.00% 50,047 2.00% 2.00% 2013 2.50% 51,818 3.00% 51,550 2.00% 2.00% 2014 2.50% 53,113 3.00% 53,100 2.00% 2.00% 2015 2.20% 54,281 2.20% 54,268 2.00% 2.00% 2016 2.20% 55,475 2.20% 55,462 2.00% 2.00% 2017 2.50% 56,861 2.20% 56,682 2.00% 1% + 1.5% for PERF 2018 2.00% 57,998 2.00% 57,957 2.00% 1.5% INPRS Contribution

295 City of South Bend, Indiana Insurance Coverage 2018

Limits of Estimated Type of Coverage Liability Annual Premium Liability Comprehensive General Liability Statutory Self-Insured Police Professional Liability Statutory Self-Insured Ambulance Malpractice Liability Statutory Self-Insured Premises Liability Statutory Self-Insured (Clay Utilities, Century Center, Parking Garages) CGL - Stadium Statutory Self-Insured Liquor Liability 1/1/18-1/1/19$ 1,000,000 1,963$ Premium Special Events (Arbor Day/Rum Village Aerial) 4/20/18-4/20/19$ 1,000,000 2,510$ Premium Crime Public Employee Dishonesty 12/31/18-12/31/19$ 1,000,000 9,205$ Premium

Property 7/1/18-7/1/19 All risk blanket building & contents$ 550,000,000 425,292$ Premium Business Income Included in above Included in above Machinery Breakdown Included in above Included in above Fine Arts Included in above Included in above Valuable Papers & Records Included in above Included in above Contractors Equipment Included in above Included in above Flood Insurance - Pump station & contents 1/15/18-1/15/19 $ 839,200 8,882$ Premium Eddy Street Commons Parking Garage 3/2/18-3/2/19 Building & Infrastructure $ 36,000,000 21,833$ Premium Business Income & Rental Value $ 15,000,000 Included in above Flood $ 25,000,000 Included in above Earthquake $ 25,000,000 Included in above Other 1/1/18-1/1/19 Workers Compensation Statutory Self-Insured Third Party Fee Statutory 53,000$ Fee Excess Over Self-insured Statutory 151,028$ Premium/Fee $400,000 Retention Each Accident

Source: City of South Bend Administration & Finance Department Gibson Insurance Company

296 City of South Bend, Indiana Miscellaneous Statistics December 31, 2018

Police Department Department of Public Works 2016 2017 2018 2016 2017 2018 Authorized Officers 247 230 237 Traffic Signals 164 163 163 Vehicles 363 340 428 Street Lights (City maintained) 3,015 3,015 3,015 Special Officer Groups: Miles of Streets 525 525 525 K-9 Patrols 8 7 7 Miles of Sidewalks 695 695 707 SWAT Team 17 18 18 Miles of Alleys 398 398 398 NEST - Special Neighborhood Unit 9 12 12 Miles of Sanitary Sewers and Storm Drains 691 691 692 Motorcycle Patrol Officers 7 6 8 City Owned Vehicles & Related Units 1,183 1,190 1,125 Bomb Squad 3 3 3 Trash Picked Up Per Week (in tons) 556/wk 568/wk 568/wk Crime Prevention Officers 3 4 3 Crime Data: Sign Shop Murders 15 17 9 2016 2017 2018 Rapes 70 93 66 Work orders for sign maintenance, Robbery 388 345 365 installation or removal 3,119 1,641 1,642 Aggravated Assault 565 611 782 Miles of yellow and white paint 288 297 311 Residential Burglary 955 830 685 Pre-formed plastic arrows used for Non-residential Burglary 286 362 350 street markings 91 46 216 Larceny 3,359 3,438 3,288 Crosswalk painting at intersections 487 387 220 Auto Theft 566 469 510 Turn arrows in turn lanes - - Arson 47 37 47 Detour routes - - Calls for Service 103,183 99,542 96,853 Temporary No Parking postings 462 499 512 Dispatches 103,183 99,542 96,853 Built Portables - - Miles Driven 3,137,616 3,038,700 2,993,092 Railroad Crossings 7 7 4 Arrests 2,342 2,229 2,664 Special Signs Built 350 273 532

Fire Department Barricades set up for events (# of events): 86 100 136 Paid Department established 1887 Block Parties 47 40 28 2016 2017 2018 Sworn Firefighters Sewer Utility (51 of which are Paramedics) 244 253 255 2016 2017 2018 Fire Apparatus 20 20 20 Customers 40,043 40,543 40,680 Hazardous Materials Truck 1 1 1 Dry Tons of Sludge produced per year 2,704 2,397 2,565 Reserve Pumper Trucks 3 3 3 Miles of Sanitary Sewer Lines 230 230 232 Reserve Ladder Trucks 2 2 2 Miles of Storm Sewer Lines 155 155 155 River Rescue Boats 3 3 3 Miles of Combined Lines (not separated) 305 305 305 Ambulances 7 7 4 Neonatal (Newborn) Units 3 3 3 Water Utility Fire Runs 3,421 3,582 3,894 2016 2017 2018 Ambulance Runs 14,583 15,442 18,765 Customers/Meters 40,670 41,200 41,275 Irrigation Customers 2,973 2,907 2,905 Wells/Pumps in service 30 27 30 Pumping Capacity 53.7 m.g.d. 48 m.g.d. 40 m.p.g. Daily Consumption 14.6 m.g.d. 14.4m.g.d. 14.6 m.g.d. Peak Demand 26.5 m.g.d. 25.8 m.g.d. 25.1 m.g.d. Miles of Distribution Systems 583 586 587 Fire Hydrants 5,459 5,539 5,550

297 City of South Bend, Indiana Miscellaneous Statistics (Continued) December 31, 2018

South Bend International Airport Convention Facilities

Passenger Volume: Century Center 75,000 square feet of exhibit space Airline South Shore Bus to O'Hare/ 2,270 max available seating Year Enplanements Train Midway 694 seat theater 2014 301,878 251,426 37,315 Morris Performing Arts Center 2,500 available seating 2015 314,300 248,506 34,394 Hotels/Motels 25 Hotels/Motels 2016 328,897 243,920 34,145 3 Bed & Breakfasts 2017 305,491 260,794 33,696 Major hotels and meeting rooms: 2018 368,877 246,641 27,044 DoubleTree by Hilton facilities to seat 600 Waterford Estates Lodge facilities to seat 500 On average, more than 1,600 airline passengers travel The Morris Inn facilities to seat 400 through South Bend International every day. Aloft facilities to seat 150 Health Care Commercial airlines with operations at South Bend The City of South Bend has excellent health care access International Airport (market share): at costs below the national average and the lowest in the 2017 2018 Midwest region. The City has one major hospital: Allegiant Air 31.73% 26.98% Beacon Health Systems (Memorial Hospital) 525 beds Delta Connection 45.79% 41.56% United Express 20.63% 19.50% Communications American - 10.24% Access to: Charters/Nonscheduled 1.85% 1.72% 3 Major Television Networks: NBC (WNDU), ABC (WBND), and CBS/FOX (WSBT) Total 100.00% 100.00% 1 Public Broadcasting Television Station (WNIT) 2 Local Television Stations (WHME, WJSV) 1 Major Newspaper (The South Bend Tribune) 25 Radio Stations Transpo South Bend Public Transportation Corporation Famous Residents 2017 2018 South Bend has been the home to the many distinguished Motor Bus (Fixed Route) individuals including the following persons: Route Miles 291 290 Schuyler Colfax, 17th U.S. Vice President Ridership 1,571,446 1,553,926 John Fogerty, singer Miles of Service 1,356,792 1,420,366 Michael Warren, actor Revenue Miles 1,282,475 1,361,525 Chad Everett, actor Demand Response (ACCESS) Sidney Pollack, actor/director Ridership 68,572 76,323 Knute Rockne, football coach Total Miles 347,186 395,061 John Wooden, basketball coach Revenue Miles 312,417 344,767 Joe Kernan, former South Bend Mayor and Indiana Governor Ryan Newman, racecar driver Skylar Diggins, woman's basketball player Other Transportation 43 Trucking Lines, 33 Terminals Other 4 Interstate Bus Lines - Incorporated in 1865 4 Major Rail Systems (freight and passenger) - County Seat of St. Joseph County - South Bend officially began under the name South Hold, but the Colleges and Universities name was changed by the Post Office in 1830 to avoid confusion Universities and Colleges Enrollment with other communities that used that name. The name South 2017 2018 Bend was used because the City is located at the southernmost University of Notre Dame 12,393 12,393 point of the St. Joseph River. Indiana University at South Bend 5,385 5,214 - Average High Temperature: Bethel College 1,650 1,650 January 31 degrees Fahrenheit St. Mary's College 1,600 1,600 July 83 degrees Fahrenheit Holy Cross College 500 500 Trine University - South Bend 78 78 Purdue Polytechnic Instittute SB 150 120

Technical Colleges Enrollment 2017 2018 IVY Tech Community College * 5,694 5,547

298